Risking it All in the Name of Business?

What type of an entrepreneur are you? By this I specifically mean are you a risk taker? Take 5 minutes to have a think about this. When was the last time you took a risk? How did you come to your decision - was it spur of the moment, gut instinct, or did you quickly weigh up all the evidence to make a decision?

This post has led me to think about what exactly is a risk? I think risk has different meanings to different sectors and different people. Risk to a degree is personal perception. What one person views as a risk another may not and vice versa. It is probably a good idea to have another think for a moment and decide what you view as a risk. Although you may not be able to come up with an absolute idea as to what you view as risk it could be useful to have an awareness as it may affect your decisions in the future. To answer the question what is risk, in my opinion, at its most basic, risk is when we stand to gain or lose by making a certain decision. Obviously, if we make the right decision we gain, or if things don't go the way we wanted we may lose.

This leads me to my next question. Can risk be calculated? Is there a simple formula for working out a risk? A risk can sometimes be calculated as a probability. However generally speaking some risks can be influenced by factors you have control over whilst the outcome of other risks may depend upon factors outside your control. There is probably no 100% sure way to calculate and take a risk as an entrepreneur and be certain you've made the right decision. This is probably more true in the current economic climate than what it ever has been.

What you can be more or less certain of however is this. If you are to make it and survive as an entrepreneur you will have to take risks and learn how to take them efficently. Rarely does anyone ever make it by playing it safe and remaining in the status quo. These days if a business stays still even for a moment it will get left behind. Based on this you could even argue that by not taking any risks you are being a risk taker. That might sound a bit confusing but think about it. By standing still you could be risking getting left behind! My thoughts here would appear to be supported by Indian entrepreneur Lord Gulam Noon who when speaking to the BBC is quoted as saying "if you don't take risk, you risk even more". You can watch his interview or read the transcript at the BBC news website by clicking on this link"Britain's entrepreneurs 'must have a dream'.

Whatever industry you are in you will need to be both proactive and reactive to the needs of your customer base. As an entrepreneur, to a degree, you need to be a fortune teller. You need to learn what your customer base will want in the future. There is no exact science behind this however if you listen to your customers closely and build up a relationship based on trust you have a better chance of being able to second guess their future wants and wishes.

This said, taking risks, or at least taking them well, is a very specialist skill. That will come more naturally to some than others. To just take risks blindly will likely be more dangerous than playing it safe.

Of course, there is always the argument that if you plan well in terms of a business plan you will be minimising any risk taking. This is by know means a guarentee though. If you have not yet started your journey into entrepreneurship I would urge you to have a good think about your views surrounding risk first.

You might find it helpful to read the following article by Tom Ashbrook "Risk in Entrepreneurship" which is located on "Entrepreneurships" website and located within their "Resource Centre". I enjoyed this post and hope you find it useful too.