When it comes to being a business owner, you have to have a lot of guts. You need to be willing to take a few leaps of faith and be fearless when it comes to taking risks. And if you’re not willing to do these things, well… you might have to say sayonara to future business success.
Being a successful business owner all comes down to how much risk you’re willing to take. One thing you must remember is this: your venture’s success shouldn’t solely be based on your business’s cash flow. Success should also be measured by your company’s growth, the lessons you learn, and the skills you gain along the way.
Keep on reading to find out why taking risks means so much more than being rich.
Importance of taking risks in business
Whether or not you are willing to take risks can make or break your business’s success. Not being risky enough can have you forever wondering what would’ve happened if you did. But, taking the wrong risks can lead you down the path to failure.
So… what’s an entrepreneur to do? Do you hide in your shell from risks? Or, do you take a leap and go for it? Before you shy away from taking on risks, let’s break down why you should take them in the first place.
Taking calculated risks can help entrepreneurs:
- Gain more knowledge and skills
- Learn what does and doesn’t work for their business
- Get ahead of the competition
Not convinced about this whole “risk-taking” thing quite yet? No worries, I get it. But before you dismiss the idea of risk-taking altogether, take a look at five reasons why it’s important to have some guts and take risks in business.
1. You never know until you try
What if, what if, what if. If you’re an entrepreneur who likes to play it safe, you’ve probably said “what if” to yourself about a gazillion times. Instead of constantly wondering “what if,” take the plunge into risk territory.
I don’t know about you, but I absolutely despise wondering “what if?” Think about it. Who really likes a bunch of what if’s eating away at them?
Risks are all part of being a business owner and entrepreneur. Heck, if I didn’t take all the risks I did, I wouldn’t be the businessman I am today. I wouldn’t have my successful accounting and payroll software company, Patriot Software. And I wouldn’t have learned nearly as much as I know now.
Sure, you never know whether or not a risk is going to pay off. But, you’ll definitely never know unless you give it a shot.
2. You live and you learn
You probably heard it a million times before… “You live and you learn.” You’ve heard it from your parents. You’ve heard it in school and business. And now, you’re going to hear it from me.
Everyone is human. And a part of being human is making mistakes. The glory of making mistakes is having the opportunity to learn from them. And those mistakes (although it might not seem like it at the moment) lead you on a path to success. Mistakes help you grow as a person internally, and that’s something money can’t buy.
The more mistakes you make, the more you can grow as an individual. So, don’t be afraid to take risks.
Take those risks. Make those mistakes. Grow as a person and business owner.
3. You can boost innovation
Innovation is all about putting new (or in my case, sometimes wacky) ideas into motion. Innovative ideas and actions set your business apart and help you grow your company.
But, what if innovation didn’t exist? Well, my friends, innovation can’t exist unless you’re willing to take risks. If you’re afraid your new idea might fail, then you’ll completely stifle your business’s creativity.
OK, so we all know that innovation doesn’t always pay off. Some crazy ideas might seem brilliant at first—until they fall flat. But without taking these risks, there wouldn’t be so many cool businesses that exist today.
Instead of focusing on how much your risks will affect your cash flow, think about how they can take your business to the next level.
4. You can stand out
Setting yourself apart from competitors can be difficult, especially when you’re fresh in the market. Sure, you can use your value proposition to stand out from the competition. But, you know what else you can use to your advantage? Risks.
Taking risks shows businesses in your industry that you’re fearless. Not to mention, taking calculated risks can also help you stand out to your target customers.
Instead of sticking to the status quo and trying to blend in, don’t be afraid to take a few risks and make some leaps in your industry. Just remember to make sure your risks are calculated, researched, and planned. You don’t want to just make decisions and take risks all willy-nilly.
5. You don’t succeed by playing it safe
If you want your dreams to become a reality, you won’t get there by playing it safe. Risk-taking opens up the door to opportunities. And if you’re an entrepreneur, opportunities are your golden ticket to thriving as a business.
When it comes to business and taking risks, you can’t always be on the safe side. Playing it safe your entire career as an entrepreneur can cost you unique growth opportunities and be costly to your business in the long run.
Instead, take a few risks and see how it goes. You never know what might happen…
How to successfully take risks
If you want to effectively take risks, you need to come up with a solid game plan. Your plan should consider things like researching different risks and weighing the pros and cons. Put your plan into action and ace risk-taking by using the three tips below.
1. Think about long-term effects
Before diving feet-first into a pool of risk, think about how it will affect you and your venture in the long run.
What happens if your risk pays off? What if it doesn’t? What if your risk completely destroys your company? OK, OK, I don’t mean to go all worst-case scenario on you. However, you should be thinking about these questions.
Prior to taking any type of risk, think about its long-term effects. The best risks are the ones that are researched and thoroughly planned out. Consider your next moves and create a solid plan before you take a risk.
2. Fully understand what you’re risking
If you want to successfully take risks, you have to understand the level of risk and what you’re putting at stake. If you go for risk without analyzing it first, you’re bound to run into some roadblocks and issues.
Before you make a risky decision, perform a risk analysis. Look at things like your competition, business budget, and possible outcomes. The more you calculate the risk, the better off you’ll be in the future.
3. Be ready for failure
Like I said before, failing is a major part of being an entrepreneur (and being human). When taking on risks, brace yourself for some failures.
No business owner is perfect. And at some point or another, you’re going to make some blunders. But that OK. The only thing that can hold you back from succeeding is latching onto your past failures.
Prepare yourself to fail. But also prepare yourself to get right back up and try again. Here’s a piece of advice I want to leave with you: learn from making mistakes rather than letting your mistakes make you.