Use Risk-taking to Create Opportunity for Your Business
Starting a new business is risky. Statistics from any source will tell that most new businesses fail. There is no guarantee for anyone. With an intelligent approach to risk-taking and with the guidance of mentorship such as what you’ll find at Griffin Growth Labs, the danger shrinks. Knowing you cannot succeed without taking a few risks, how do you prepare to do that?
One way to prepare is to buffer your business against the risk. You want to move into a new market space. That’s a risk. If things work out, your enterprise grows. Everybody is happy. If the move does not work out, your business will see a decreased profit. You can mitigate potential damage by arranging your finances such that the risk won’t kill you. Taking a risk so substantial that your company tanks if it does not work out is not a good idea. Make sure you balance your risk against your ability to stay afloat.
Another way to make risk-taking work is to do market research. What do people buy in your industry? What is offered but ignored? Know your industry’s market trends well. That information empowers you to plan for risks that are more likely to succeed. Perhaps offer pre-orders or set up a Kickstarter. If the idea takes, you move forward with confidence. If nobody bites, maybe the plan needs work before execution.
Expertise in industry trends gives you the power of foresight. Is there a new manufacturing process that might be more effective and cost less? What about the materials that make up your product? Should those change? How about your branding: is it working? Your industry knowledge can give you the ability to know if it is the right time to switch out something you currently do for a new idea. You can take that new risk in confidence if you intimately know your industry.
Ask for help. Collect people in your network whose shoulder you can tap on to ask for advice. When you design a plan to take a risk, knowing that you have input from other smart people will increase your confidence. If you do not have anyone right now whom you could ask for help, consider getting out into your entrepreneurial community or finding a good coach before taking too many risks.
Be aware that some risks will not pay off. It would be strange if everything worked the way we wanted it to work. Sometimes you will step out with the best preparation and advice available, and the deal falls apart. Something, sometime, will go wrong. If you are ready for that possibility, you can survive to try again.
Try again. If a risk does not work out, tweak the effort and try again. Unless your idea is not profitable, it will be the execution that determines success or failure. You might need to ditch the idea for now. You might be able to try again using a different approach. You will want other smart people in your core team and brain trust to provide competent perspectives. Examine the failure to determine what went wrong. Then, perhaps you give it another shot.
Another benefit of risk-taking is knowing what will happen if you take the risk. When asked about their greatest regrets, older folks say that they did not do tops the list 100% of the time. You will always ask yourself, “What if…?” This self-doubt does not justify every risk. Some risks will not be worth taking. However, if the risk might just work, you might just end up kicking yourself for a long time if you do not take it.
Risk-taking is inherent to entrepreneurship. Starting your business is a risk. Innovation is a risk. Embrace risk! Let it help your business reach new heights by thinking risks through but, ultimately, taking them.