How to Master Fear and Manage Small Business Risks


Being an entrepreneur is sexy and rewarding, but it’s also full of inherent risks. When you launch a start-up you put everything on the line: Your financial well-being, career opportunities, family relationships and emotional health. Even the most successful entrepreneurs will tell you that when the time came to put up or shut up, inevitably they had to ask themselves: “Can I risk this?”

Since risk is a non-negotiable when it comes to entrepreneurship, your task is to identify your baseline—the level of risk that you are comfortable with—then learn how to manage it. Over time, you’ll want to up the ante, take on more risk and move higher up the continuum. You’ve heard the old adage, “the bigger the risk, the greater the reward.”

If you’ve been hesitant about your next risky business move, follow these proven steps to master fear and make risky business more manageable.

Risk Baseline: Can you handle it?

Risk is defined as the potential that your actions—or inaction—could lead to a loss; an undesirable outcome. When you establish a risk baseline,  it should serve as the basis for measurement of all other actions surrounding your business. For example, the lowest possible baseline could be “If I do X, and it leads to a loss, I won’t lose sleep over it — I can handle it.” Here’s how to set a baseline.

  • Develop a list of business risks that you’d like to take within the next 30 days.
  • Next, assign a measurement of risk to each line item (Low, Moderate or High).
  • Then develop what I like to call, an “I Can Handle It” column that denotes a) I can handle it or b) I can’t handle it.

Once you review this basic list, you’ll have a better idea of where your risk threshold lies. Now that you understand your risk tolerance, it’s time to manage it.


×