Excuses, Excuses: Is Risk Aversion Ruining Your Business?
You can talk yourself out of just about anything. Sometimes being cautious works in your favor, but it can also limit your small business’s growth. The most successful entrepreneurs are not averse to taking risks.
So says Tom Panaggio (pictured), author of The Risk Advantage: Embracing the Entrepreneur’s Unexpected Edge. He argues that risk avoiders are opportunity missers. In an interview with the Intuit Small Business Blog, Panaggio shares some of the typical excuses that business owners make for not taking more chances — and the impact their decisions have on the bottom line.
Timing Is Everything
Well, maybe. But truth be told, if you’re waiting for all the stars to align before you make a move, you could be standing still until eternity. “‘The timing isn’t right’ is an excuse,” Panaggio says. “It’s easier to refocus the target or to come up with a reason to delay making a decision or a change when you’re not willing to commit just yet.”
Business plans sit in boxes or on hard drives as their creators wait for the right circumstances, sufficient funding, free time, better economic conditions, etc. According to Panaggio, many existing businesses remain less successful than their owners would like because those very same owners are hoping that tomorrow conditions will be just a little bit better for advancing their goals. While you wait for the perfect moment to strike, competitors are laughing all the way to the bank.
Conventional Wisdom Rules
“I tried that once, and it didn’t work” is another excuse that can stymie business owners. Whatever happened to following the old adage, “If at first you don’t succeed, try, try again”? Small-business owners can be too quick to throw in the towel on marketing. “Maybe you had the wrong message or the wrong audience,” Panaggio points out. “How much time did you give it, a week? It can take a long time to get the results you want.”
Marketing is not an exact science. It’s also not cheap, but it is a necessary expense. Not investing in marketing or cutting back on it because one campaign didn’t produce the desired results is a risk you can’t afford to take. “Without proactive, long-term, and consistent marketing, businesses die,” he notes.
When drastic action is required to keep your business afloat, it’s easier to make decisions because you have few options. But when things are going smoothly, your comfort zone may feel downright cushy — and you can get lulled into a false sense of security. “If nothing’s broken, why fix it?”
The incentive to keep pushing may not be there. “Success doesn’t teach you a lot; failure does,” Panaggio says. When things are going well, you can lose your edge and stop taking risks. You have to embrace risk daily.”
Why? “The competition is always nipping at your rear end, and consumers’ wants, needs, and desires change. You have to keep up. Keep taking risks,” he advises.
Panaggio says entrepreneurs must stop telling themselves the lie that they’ll get to it eventually. “It” can be anything from making sales calls to researching potential clients.
“If you keep saying other things are more important — or that if you just get X out of the way, you’ll have all the time in the world to pursue Y — and keep immersing yourself in busywork to avoid the true priorities, your business won’t last long enough for you to tackle them at some undefined point down the road.”
Ready, Aim, Wait
Of course, you need to be cognizant of market changes, but don’t use them as a crutch. “It’s a good idea, but circumstances have changed” is another excuse Panaggio hears. For example, an entrepreneur was poised to launch a product and pulled back because of an unexpected change in the market. Moving the target changes the objective, goal, or focus of your business.
“Once you move the target, you stop, re-aim, buy yourself more time. This is way to avoid moving forward, to avoid execution,” he explains. While you refocus and refocus some more, competitors move forward.
“Entrepreneurs take a risk to start their business. They can’t relax and run their business like they’re playing not to lose vs. playing to win,” Panaggio adds. “They have to maintain that edge, take risks.”
Sheryl Nance-Nash is a business writer for Intuit and is passionate about solving small business problems.