5 Reasons Why Embracing Risk Is the Entrepreneur’s Unexpected Edge
“The unexpected edge for entrepreneurial success starts with identifying a worthy risk and then having the courage to take it.”
Jump! It’s only five thousand feet down. Embracing the risk of starting a business is a lot like parachuting; from afar, it looks like fun, but when you are standing in the open airplane doorway five thousand feet above the ground, it’s a different story. It’s easy for the pilot to tell you to jump; he’ll still be in the plane as you plunge toward the earth’s surface. Starting a business is as intimidating, and rightly so, because no matter how great your idea, nothing guarantees your success.
It can come as a shock when you realize that this same feeling will be with you throughout your entrepreneurial journey, and when things aren’t going well, you’ll wonder why you have to jump from the plane again. (“I took the risk, I started a business, and I jumped, so why am I here again?”)
Jump, and Jump Again!
Times like these are treacherous as your motivation to follow through can evaporate and your enthusiasm wanes. In order to build and maintain a successful business, you will need to jump repeatedly, and from higher altitudes. Failure to do so kills most businesses because many people expend so much emotional energy gathering the courage to start their businesses, they falsely believe that once they take the risk and commit they are done. They think they confronted the fear of risk, and now it’s behind them.
Unfortunately, you will be standing at the open airplane doorway many times. When this happens, taking risks feels more difficult. We can only hope that we are able to gather the courage to risk another leap. We hope that the parachute will open properly.
Although we typically associate risk with an initial leap of faith that goes into the decision to start a business, I say entrepreneurship is all about risk. To achieve real success, one must consistently embrace risk every day, not just on the business’s first day.
Here are five reasons you must embrace risk, not just the day you launch your business, but also every day thereafter:
1. Risk and opportunity are soul mates.
After 30 years of entrepreneurial achievement, I know the secret to business success: no opportunity comes without risk. Opportunity and risk are forever linked in perfect union; they are soul mates. The only way to take advantage of an opportunity is to accept the associated risks. Therefore any business that factors success into its plan has to leave certainty behind and embrace risk.
Everyone loves an opportunity, yet many consider the idea of risk as unacceptable because it sparks fear of failure and of the unknown. But real opportunity shows up only where risk is present. Certainty, on the other hand is a false reality, it's what the fearful seek but it doesn’t exist in the real business world, as there is no worthy opportunity that is without risk.
2. Embracing risk forces you to step outside your comfort zone.
You just cannot advance yourself without stepping out of your comfort zone and taking a risk. All businesses must maintain perpetual forward progress, and this demands we accept the risks of making decisions and change. However, these risks put us squarely into the unknown and trigger a self-preservation reaction known as loss aversion – not losing is preferred to winning.
Those who suffer from loss aversion assume that “playing not to lose” is a safe, “smart” strategy. Why risk when it appears we have achieved a level of success? The simple answer is your competition is still playing to win and they are not satisfied with the status quo. Stepping outside your comfort zone and into the arena of risk reverses your mindset and allows you to meet the challenge of your competition while providing you with the motivation to accommodate a dynamic marketplace.
3. You will be focused on execution and making something happen.
When the planning stops, the execution must begin – planning is theory, execution is reality. My father, a successful basketball coach, told his players to “make something happen” whenever they entered the game. This same advice applies to business leaders and entrepreneurs; business is all about execution when given an opportunity. Those who can make something happen when presented with an opportunity, at least have a chance to succeed, while inaction shatters any hope of success.
My philosophy has always been “Ready, Fire, Aim,” which traditional business advisors would consider far too radical and reckless. But when the emphasis is on execution, rather than detailed planning, things happen and your business is moving. When a roadblock or impediment blocks your path, the execution-focused business leader can pivot quickly.
4. Each risk embraced strengthens your commitment to success.
Just as risk and opportunity are connected, so are commitment and enthusiasm. Entrepreneurs are committed to making their dream come true. While they might fear the idea of risk, they have the self-confidence and motivation to embrace it, enthusiastically. When adversity does strike — and it most certainly will — leaders with character rise up and face it head-on because they know the journey must continue. And this is most assuredly freedom.
Victories, as well as defeats, teach us and become our wellspring of knowledge from which we draw guidance, inspiration, and answers. The act of embracing risk results in a new experience on our journey to success, which strengthens us as business leaders.
5. Your competitors will avoid risk.
At my company, our motto was very simple: "He who markets most wins." In fact, I can make a case that without the aggressive marketing strategy we engaged in from the beginning, we never would have dominated our market.
We also used marketing risk as a competitive edge against our competitors. Anyone wanting to become a potential competitor had to be willing to match our investment and commitment; just doing a little marketing wouldn’t have been enough to catch us. Competitors were forced to divert resources and money from other areas of their business to keep up with our aggressive marketing strategy, therefore limiting their ability to expand and innovate.
Opportunities are always there for you to grab. If you want to realize a dream, accomplish a daunting goal, or simply start your own business, you must be willing to embrace risk.
If you have the courage to embark on your own entrepreneurial journey, you will need a unique advantage to succeed in such a competitive and unforgiving environment. You must have an edge. The unexpected edge for entrepreneurial success starts with identifying a worthy risk, and then having the courage to take it.
