Risk and your ability to manage it can make the difference between a successful, growing career and a ho-hum one. Let’s face it; most successful business ventures involve a great idea and some risk. In fact, risk and the entrepreneurial spirit go hand in hand. But how do you know which risks are worth taking and which ones are too, well, risky?
Steps to consider for successful risk taking
Here are some steps to consider for successful risk taking.
Take time to consider your options. Risk taking and impulsiveness are not the same thing. Think all your options through. For example, if you are considering hiring more staff and are worried about the extra payroll burden, conduct a thorough analysis of how those extra employees will further your goals and help you better serve your clients or customers.
If you are thinking of buying office space and are worried about making mortgage payments, take a good look at how owning will save you money over the long term. Make a list of all the pros and cons that surround your risky decisions. When you realize the pros outweigh the cons, the burden of risk is lighter.
Conduct any necessary research. Many businesses fail because of a lack of due diligence. Maybe the low rent on that storefront is not such a bargain when you consider the low amount of foot traffic you will receive. Would it be less risky to pay more for rent in a high-traffic location or can you compromise with a site in a moderately busy location?
Be sure to consult people you trust. Run your risky idea by a trusted family member or business associate. Often times, someone who is not as close to the situation as you are can point out problems in your plan that you were not able to see. On the other hand, they also can give you the confidence to go with something daring. Ask this person about times they have made a risky decision and how it worked out for their business.
Set a time table. Risks don’t have to be all or nothing endeavors. Is there a way you can start in a new direction without totally abandoning the way you currently do things? If you are considering a new product launch, for instance, can you do a trial offer to test the waters? If you are considering leaving a staff position to launch a start-up, can you work nights and weekends on your new venture before you go cold turkey?
Plan a schedule that makes sense for rolling out your plan. If necessary, hold a team meeting to get everyone on board.
Play devil’s advocate. Sometimes we agonize over a risky decision so long that we lose perspective. Ask yourself the “what ifs.” What if you don’t take this risk and stay the same? Will you be able to hold your own against your competitors in the growing marketplace? Or is it just a matter of time before they will be doing what you are considering now? Wouldn’t it be better to make the change now before your competition does?
Go for it. You can ponder all you want, but at some point you have to make a decision on a risky plan or the opportunity may be gone. After you have followed the first four steps, it is time to take the plunge.
Risk taking: Not all risks are financial
Not all risks are financial. Some involve other aspects of our lives. Have you been offered a new position that will involve a big move? You may be weighing the risk of leaving friends and family behind or maybe you are worried about the expenses of relocating.
What can you do to prepare for any problems? You can gather information on where to live and how to save on money or transportation costs. Don’t feel you have to buy a home right away. You can rent until you feel surer of your surroundings.
When considering a risky decision, it’s always a good idea to go back to the goals you have set for yourself. In order to get where you want to go professionally or personally, you may have to take this risk. In other words, there may be a significant cost to not taking a risk.
Business consultant Gary Ryan Blair says risk taking is essential to success in any high-stake goal that is worth reaching. While he notes that thoughtless risks are destructive, he says he believes that it is much more wasteful to be so cautious that you fail to seize an important opportunity.
Finally, the best way to determine whether or not you should take a risk is to examine your own heart. No amount of thinking, monitoring, consulting or dreaming will make a risk a sure thing. According to Can Akdeniz, the author of the book Cool Boss: The Art of Leadership in the 21st Century, the act of successfully taking a risk comes down to how much passion you have.
“Passion acts as a far greater guarantee than facts or figures could ever give,” Akdeniz writes. “With enough passion, failures and set-backs are viewed only as learning tools and steps on the road to success. The drive and determination with which you pursue your goals are what success ultimately relies on.”
Don’t let doing well keep you from doing something great. Don’t let the fear of failing keep you from trying something new. It may be time to take that risk.