4 Things You Should Know About Risk-Taking as an Entrepreneur
Risk-taking is a scary and non-negotiable feature of entrepreneurship. The decision to start a small business alone is a scary one and whoever takes it has only just launched their risk-taking career as everything that follows from thereon is risky.
Even outside the context of business and entrepreneurship, risk-taking is very unattractive. Inaction is more attractive. It does not require much from you. It’s very safe. You can sit on the sidelines and enjoy the view while others step into the ring and fight. There’s no risk in being a spectator. However, there is no gain there either. Successful entrepreneurs are the ones who take the biggest risk. They are ready to win big or lose big. And that desire to take huge risks is what differentiates the winners from the losers.
However, small business owners don’t have to take blind risks. Here are a few things you should know about risk-taking as an entrepreneur.
1. No Entrepreneurship Without Risk-Taking:
This is one of the important things you have to know. There is no business without risk-taking, whether big or small. You’ll risk everything, from your own personal money as your initial capital to your reputation, as you put your name, properties, and life on the line to get capital from banks and investors. You’ll risk having a steady source of income, especially if you quit your 9-5 job for this. Even the grand business idea you have is a risk since you don’t know whether it will work or not.
So everything about starting a business and running one right from the time you decide to turn your back on monthly salaries is a risk. Knowing this will help you set your mind on the coming journey. Since you’ll be taking risks all through your journey, you might as well start early.
2. Not All Risks Are Rewarding:
While it is true that risk-taking will always pay off in the long run, not all the risks will pay off. The practice of taking calculated risks will always be rewarding because you cannot build a business without risks. But not every single one of those risks will be rewarding. Some would be mistakes that you will have to move on from.
However, what matters is you don’t stop, and you keep building your business. As you learn on the job, you gain experience, and you know how and when to take risks. When you master the art, you will experience fewer losses and more wins.
3. No Innovation Without Risks:
Launching something new comes from a place of confidence and, again, the boldness that makes you take a big risk. When people get accustomed to a product or service, they never want to stop. When you introduce something new into the market, and try to get people to buy it, you are taking a huge risk.
And this is a good kind of risk because customers’ desires are constantly changing and evolving. Sometimes, the entrepreneur is the one who determines what the customers want by creating products customers did not even know they needed.
Hence, the fear of failing with that new product should not discourage you because there is no innovation without risk-taking. So if you are trying out something new or entering an unfamiliar market, remember that no new thing, no invention, ever came from producing the same thing over and over again. The very idea of inventing and innovating is from doing something that no one is doing. And that is risky.
4.The Starters Win the Most:
One of the major hindrances to risk-taking is fear, and this fear can be crippling. Do not be afraid to step into a new, unfamiliar market or launch a new product. This is because, when something prospers in the market, the first person to do it is usually the one to carry away the big wins. Others can join in later, but their profits will be minimal. There is a huge benefit to being the first to start something and to enter a familiar. Let those benefits motivate you to take that risk.
