In business unexpected things happen overnight. The business world is fast-changing and requires modern thinking and innovative approaches just to stay in and a little bit more than this to be successful. To dominate in your niche, you need to take your startup to a whole new level, to offer something that is valuable and unseen, something simple yet innovative.
Entrepreneurs make choices and every single choice carries unquestionable risks. Risk is the embracing the possibility to lose something of great value. So how much risk you should take? It depends on the situation and on your goals. The calculated risk brings action created at the moment when your knowledge, preparation and resources meet the opportunity.
If you went to business school, they have probably thought you how to calculate odds and you are familiar with risk/reward formulas, but when we talk about risk in entrepreneurship we cannot rely on the things that work on the stock market for example. Entrepreneurship is something different, it is driven by innovation and here the odds are very difficult to be calculated. Because new things are created, a whole new ecosystem appears and functions in a different way.
There are specific risks that entrepreneurs must take and these risks are related with everyday activities. Actually the whole startup venture is one big risk – giving up steady paycheck or career in big corporation, the risk to fail, the risk of sacrificing a lot of your free time, the risk of hiring the wrong people, the risk of making business mistakes. These are huge risks and entrepreneurs must be proud of themselves for the bravery to follow their passion in moments of such a big uncertainty.
The biggest risks come from your inability to fulfil specific needs of the business world. They can be related with your inability to meet the business expectations when it comes to innovation because entrepreneurship is all about innovation. The moment you fail to innovate is the moment that you face one of the biggest risks for your startup venture.
So there are specific things that you can keep in mind when it comes to risk taking situations.
Know your limits. The major risks are the ones that once you take, there is no way back. The important decisions are what can lead you to the top or put you down to the bottom. So how do you get prepared to risk? First of all you must know your limits. Before you jump into the bravest decision of your life, create a mental list with your limits. How much you are willing to give up and how much exactly you want to earn?
Be prepared. It is not smart to jump into something absolutely unknown and to look at this as a simple risk. Risks are the actions that we take and which have the potential to bring us certain lost or solid gain. It is a matter of win-lose situation. It can be win-win if you are well prepared for your venture.
Know your chances. Know how much you are willing to lose and risk to this limit. Expect failure but believe in winning.
Learn from your risks. Like everything in life, you are able to learn from specific situation. You take risks and you should study the outcome of those risks. Trust your instincts, they are important and believe in what you do. If your risks are driven by passion, there is only experience that you can get.