Risk-taking is inevitable. Whether you’re pursuing a passion project, forming a new business partnership, or building a new product – with every business decision comes risk.
The most wildly successful entrepreneurs have a willingness to take risks regardless of the outcome. This not only helps propel their business and career forward but has the potential to innovate and change an industry. Jeff Bezos, for example, sacrificed his high-paying Wall Street position to found Amazon which started as an online bookstore in his garage. Without jumping in, it’s easy to remain stagnant.
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However, most risk-taking in business doesn’t occur without thoughtful planning. Calculated risk-taking is common among entrepreneurs, start-ups, and successful companies. It involves the thoughtful evaluation of all potential outcomes, whether positive or negative. With this method, a strategy and plan are in place to anticipate red flags and pivot if your idea isn’t working as planned.
Calculated risk-taking can be broken down into digestible steps to help you work mindfully towards the larger end goal.
- Break down the decision into smaller less daunting steps
- Check your finances to see if your bottom line can handle the opportunity
- Create a plan of action by listing all potential outcomes (positive or negative)
- Be OK with saying no to another project or idea if it interferes
- Be flexible and ready to pivot if something doesn’t work
- Set regular checkpoints to see your progress
While risk-taking can be daunting, consider the reward and potential benefits. Avoid being a part of the statistic – the number of startups who fail prematurely. Being as prepared as possible for the outcome will enable you to trust more in the decision-making process. Calculated risk-taking leads to transformational change and true innovation.
By evaluating the decision closely to ensure you have a plan for all potential outcomes, you will be better equipped to handle it, if everything goes south. For more on calculated risk-taking, a helpful formula for small business owners to calculate risk, and successful company examples – view the infographic below.
Infographic source: Valpak