Just because something sounds good, looks good and feels good doesn’t make it a worthwhile risk. And yes, I know you saw your competitor run a full page ad in the annual business journal; that doesn’t mean it’s a smart move. Be wary of friends that want to bring you in on “this amazing deal.” If you’re ready to bet the farm, pay close attention to the opportunity, the risk and the reward. Don’t take blind risks.
Calculated and deliberate risk taking is essential to the growth of your small business. Information and action are the key ingredients to increasing your risk tolerance. The more you know, the less you fear. If you’re having trouble accomplishing your goals, brainstorm ways to spread the risk by teaming up with people that have the information or skill set that you need.
When you’re ready to take on more risk, first ask yourself, “What do I have to gain?” Review your current position and then decide where you’d like your business to be in the next five years. If you have great expectations then accept the fact that your success will come with many risks.
While some researchers argue that your ability to take risks is based on your cognitive skills, socio-economic background, financial situation, and education, the truth is: business is risky no matter how you spin it. In the end, the question will always be: Does the potential reward outweigh your risk? If so, what are you waiting for? And when you are faced with a game changing opportunity to risk it all. What will you do?
Article originally appeared on theyec.org. Reprinted with permission.
Erica Nicole is a serial entrepreneur, syndicated columnist, small-business expert, national speaker and Christian thought-leader. She is the founder of the small-business news site YFS Magazine: Young, Fabulous & Self-Employed.
YEC Urban is an initiative of the Young Entrepreneur Council (YEC), an invite-only nonprofit organization comprised of the country’s most promising young entrepreneurs. YEC promotes entrepreneurship as a solution to youth unemployment and underemployment and provides its members with access to tools, mentorship, and resources that support each stage of a business’s development and growth. YEC Urban’s members are successful minority business owners, entrepreneurs and thought leaders.