Being a successful entrepreneur is knowing how to take calculated risks. As business owners, we can’t keep doing the same thing while hoping for a different result. There are five steps to taking risks well, below. If you review the risk you’re planning to take and make adjustments before you take it, this process will hold you in good stead.
Step 1: Assess and ask
Break the risk down, making sure you know exactly what’s at stake, asking mentors for guidance.
Assessing, measuring, and minimising risk is a vital skill.
What is the risk? What are the key benefits? What are the costs? Costs can be financial, time and resources. Identify any significant financial costs and assess the time it will take you and any members of your team to potentially allocate resources to the project.
Who are your competitors? Review your market. Research your competitors, identifying your point of difference. Ensure you stand out otherwise you will spend much more in marketing $$ trying to be the same as your competitors.
It’s also imperative to consider different perspectives when taking a risk in business in order to reach a balanced perspective.
Step 2. Calculate
Measure and Minimise your risk. Identify what type of risk it is. Is it low, high, or a calculated risk and how can you minimise some of the risk?
In my business I only ever have one high risk and one calculated risk occurring at the same time.
To begin reducing risk, assess the market. Identify competitors, find a minimum of three points of differentiation. If there are no points of difference, reconsider the project as the risk is too high.
Step 3. Core values
Know your top five core values and make sure you’re aligned to them. The priority of our values changes over time, so it’s important to check in now and then.
When considering any new risks, ensure they align with your highest values. For me, I need to love and feel passionate about a project. And it has to align with my honesty and health and wellness values.
Step 4. Intuition – trust your gut
Our incredible bodies are more intuitive than we give them credit for. Practising daily mediation brings me great clarity during times of new project risks.
Ask yourself these three questions:
- If money was no object, would you still be doing this?
- Does it give you goosebumps and butterflies at the thought of it?
- Can you imagine being just as happy doing something else?
Step 5. Systems
Viable systems in business are a necessity for taking on more risk. Ensuring systems are in place to take on the risk and deal with complications are essential. Business is rarely a smooth ride, and one of the most valuable skills I’ve learnt is not to overreact when things don’t go according to plan.
Be clear on company policies and where you stand on customer service, to ensure you have the systems to cope with increased demand as your company grows.
By introducing a risk processing system like these five steps, you may just start taking better risks that pay off for your business.
Rachael Ferguson, CEO, Synxsole and co-author of “Back Yourself: Advice and inspiration to create the business you’ve been dreaming of”
