Are Your a Risk Taker or Risk Averse—And What Does It Mean for Your Business?
I've run into two different types of people as of late: risk takers and those who are risk averse.
The risk takers seize the moment and jump on a potential opportunity, usually too quickly. Risk averse people plan, then plan, and then plan some more, always second-guessing the approach.
Both come with their share of disappointment. The risk takers take too many risks without any planning and, like a chronic gambler, too often walk away a loser. The risk averse are continually stuck in the development of the plan, but the plans are just plans. Since the plans will never be good enough, they never get implemented.
Finding the middle ground in risk-taking
It's important you find the middle ground resulting in calculated risk-taking. Whether starting up a second location, bringing in a new line, or increasing your staff to offer better customer service, creating a plan to get there is important.
Risk-taking is a good thing. But for someone who constantly takes risks, you're going to get burned, if you haven't already. I have a client I'm working with that takes risks - too many - and they want to take another one. They have taken the same risk three or four times in the past and failed. Why? Because they didn't have a game plan. They didn't have objectives, a plan, a budget, or even expected results and tools for measurement. If they had a game plan, they would have been successful because the focus would have remained on the initiative and all duties, tasks and projects would have been assigned to specific people with deadlines attached. Then each person could have been held accountable for holding up his or her end of the deal.
More articles from AllBusiness.com:
- How Risk-Taking Can Lead to Success in Business
- Take One Thing in Your Business and Do It Better This Year
- 6 Strategies to Build Your New Business From the Ground Up
- 5 Pieces of Advice to Entrepreneurs Starting an Online Business
- 4 Common Business Mistakes That Can Stifle Your Company’s Growth
Taking some risks is part of being a business owner
But plans can hinder a business too. Too often the plan takes on a life of its own, forever being refined without being implemented.
If you're going to take on an initiative, make sure you set objectives, create strategies for your objectives, develop sales goals and most certainly have a budget and a means to measure your success. If you do that, you'll have a much clearer picture as to whether you should move forward or not. Finally, if you decide to move forward, set clear "to do" lists for all the elements and assign them to individuals with deadlines. That way you'll have a means to follow up and follow through.
Risk-taker or risk-averse: calculating your risk
I liken calculated risk taking to flying a 747 while building it. Companies are most successful when they have a game plan to get there but allow themselves to stretch and flex a bit on the journey. Once you're on the way to implementing the plan, you may find you need to change course a bit. Your gut should tell you which way to go. So just go. Don't spend the time to completely recalculate everything and create a new plan. You'll just wind up in the risk averse camp.
How are you being calculated risk taker?
RELATED: 8 Ways to Reduce Business Risk While Maximizing Potential
