Risks are an inevitable, necessary element in the life of a business. Every entrepreneur knows that the only way to move forward, to see difference and growth is to “take the gamble,” as many put it. However, contrary to what most starting entrepreneurs think, embracing risks doesn’t mean being daredevils, not caring about anything, and just acting on decisions rashly. The truth is that there’s a smart way to take risks. If you’re still exploring business opportunities or trying a business idea, embrace such risks with these tactics:
Gather as much information as you can
With lots of research, you’ll be able to assess better the pros and cons of the risk you’re taking and prepare yourself for the possible cons. For instance, if you’re considering a franchise opportunity in the food industry, you should be able to know the success rate of existing franchisees, the market share of the brand, the unique selling point over competitors, and more. Ask the franchisor about these things. It also pays to check out third-party resources to validate the claims of the company. Credible materials online cover the best sandwich shop franchises or top-performing pizza food chains, so from there you’ll be able to learn how to play the risk game. The same principle applies when you’re pursuing a business idea. Evaluate the demand, observe your competitors, and learn as much as you can.
Seek an excellent mentor
It’s good to bury yourself in books and other resources to make yourself more informed before taking risks, but nothing compares to the valuable training you’ll get from a good business coach. Mentors can offer you advice straight from their experiences. Also, they can understand all the other “external” factors you’re dealing with when taking risks, like your family’s financial security, your reputation, and even your occasional self-doubts. Thus, they make an ideal sounding board for when you’re not sure about whether or not to take risks. There are lots of ways to find yourself a mentor. Attend networking events, like seminars or conferences. Get yourself involved in the business community. Reach out to industry experts through social media. If you want to buy a business franchise, your franchisor might be a good coach.
Do it in increments
When you take risks, don’t go all in just yet. Have one foot out of your comfort zone and the other on your safety net. Test the idea or the opportunity first in small increments until it yields promising results. For instance, if you’re going to buy a food franchise, consider exploring the different packages. Perhaps you can go for a school cart or a small kiosk first before diving deep into a full-scale restaurant. In the context of a business idea, test it in phases with specific budget caps. Evaluate your wins and losses at the end of every stage, then recalibrate efforts at the beginning of a new one. The principle is to take risks with baby steps.
Risk-taking is essential in business, but it doesn’t necessarily mean jumping into the unknown impulsively. Embrace risks the smart way. Be a wise risk taker.