Spice Up Your Biz with a Dash of Risk
Posted by Shannon Reece in General Finance, Risk Management | 10 comments
by Dr. Shannon Reece
Risk?! Are you crazy?! In this economy?
Yes, taking a bit of risk might be just what you need to spice up your overly stagnant business income right now.
Why? Because doing the same thing is only going to keep producing the same results.
I am not talking about Vegas, Baby!
Taking calculated risk is not the same thing as gambling. The difference is that you are not rolling the dice, throwing caution to the wind, or leaving everything to chance. Risk allows you to weigh the cost against the potential benefit of making the decision to move forward.
So why are we so averse to risk? Mostly because failing isn’t a whole lot of fun. When given the choice, winning is much more appealing and less painful. Trial and error are a natural part of life and business, and risk can be scary because you can’t possibly plan for every contingency. But playing it safe is NOT the path to success. If you never stretch your wings, you’ll never know how high you can fly.
Learning to Skydive
If the thought of risk is making you queasy, then let’s take a look at how you can approach it with a bit more confidence. Start by understanding that the fear factor associated with risk stems from your own imagination. When facing an element of uncertainty, your mind is gifted with the ability to fill in the blanks, often with thoughts of worst case scenarios. Overcoming your fear of risk begins when you work through the following steps to assess the validity of your concerns:
Step 1 – Weigh the pros and cons of your decision.
Making good decisions means making them from a position of strength. You must define risk based on your skills, experience and environment. Just because it might be a great idea for someone else, doesn’t make it ideal for you.
Step 2 – Determine your pain threshold.
I am not suggesting that you bet the farm here. But you’ve got to decide what you are willing to lose in order to take the chance to gain. If you aren’t willing or aren’t in a financial position to lose, then wait until you are.
Step 3 – Be willing to accept failure as an option.
Well-calculated risks have the potential to pay off big, but they can completely bomb too. So you need to go into any risk scenario with the attitude that if things don’t pan out, you have a fallback plan, and will evaluate the loss objectively and chock it up as a learning experience.
When in doubt, seek advise from those in your circle of trust. The experiences of others can be a valuable asset in determining whether or not moving forward is the smart move for you. Risk is not something to entertain lightly, so set your goals, calculate your level of risk, develop a plan that makes sense for your business, and then take the leap if warranted. No risky venture has to be big to be effective, so start small and learn from each experience.
© 2011 Reece International LLC/Dr. Shannon Reece. All rights reserved.
Sport psychologist and former competitive athlete, Dr. Shannon Reece is a leading authority on how smart women can launch and grow their business in a man’s world, leveraging their unique strengths to drive peak performance. Find Shannon at www.drshannonreece.com on Facebook and on Twitter.
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It won't hurt. I promise.
Nicole Fende, A.S.A.
The Numbers Whisperer ™
President, Small Business Finance Forum
Shannon, Great information on how to measure your courage muscle. We are programmed to protect ourselves. I know that it is only through pushing past the fear and taking a risk that I have grown as an individual and business owner.
So true, Donna! I think that pushing past imagined fear once, builds confidence for doing it again and again. Nothing worth doing in life doesn’t come with a bit of stretching outside the old comfort zone. Thanks for your comment!
Great comments!
A bit fearlessness helps too.
You are right, Haralee — fearlessness stems from your ability to see your fear response for exactly what it is. And too often we turn mole hills into mountains when we let our imaginations run wild.
I like what you say at the end- no risky venture has to be big. We can start small which helps us take bigger risks since we build confidence after surviving the small ones.
Denisse, That is so true. Some of the greatest biz moves are small, but highly strategic.
Shannon — I am behing in my regular blog reading due to vacation, but I am so glad that I came back to catch this. I really resonate with the “determine your pain threshhold” part….that is what I am experiencing right now with my product research and develop. and I really need to DO just that — decide my threshhold!
Thanks – Rachel
Rachel, You can do it! And once you do, making those decisions to take on a bit of risk will be easier to tackle.
I’m so glad that Nicole tweeted about this blog today. It is in line with a discussion I had with Shannon on today’s Wednesday Workout. I’ve somewhat adopted the the mindset that you’ll never know the outcome until you try it. It’s that trial and error that allows me to take my business ideas and apply them and see what the outcome will be. As Shannon says in her blog “playing it safe is NOT the path to success.”
Go Barbara! Although playing it safe sometimes feels like the easier option, taking risk is best — but it must be calculated. By simply eliminating as many of the unknowns as you can, you reduce the presence of fear and doubt seeping in to derail you from taking action. I think Nicole would agree, plan and then do. After that, you assess the outcome, and plan your next move forward. Shannon