Risks are an inevitable part of the business. Financial, social, political and several other environmental risks permeate the world of business. For a small business owner, who operates with limited resources, these risks become even more predominant. However challenging taking a risk might seem, an entrepreneur often needs to take the plunge, since risk-taking is an integral part of the small business culture.
Hence, entrepreneurs often need to ask themselves an important question – “Is it worth the risk?” First-time and even seasoned entrepreneurs sometimes end up taking risks that are uncalled for, usually because they want to achieve fame and success through short-cuts or use resources beyond their means.
This ultimately spells doom for their business. Instead, one must objectively study the situation and proceed with caution. The former President of the United States of America, John F.
Kennedy stated, “There are risks and costs to action. But they are far less than the long-range risks of comfortable inaction.” Today, small business entrepreneurs need to rollup their sleeves and increase their risk tolerance to cope with competitive market situations. For this, they need to address the following factors, which may make them risk-averse:
• Fear of Failure:
One should never shy away from failures as they are part and parcel of any endeavor. Any experience, especially in the small business world, teaches some valuable lessons.
• Emotional Sensitivity:
In business, one needs to be open to criticisms – be it constructive or otherwise! It’s a great way to get a new perspective.
• Fear of change: Taking risks often means allowing changes to happen and a lot of people may feel apprehensive when faced with change. It is crucial to get out of one’s comfort zone and take some calculated risks. Fear of rejection: Rejection is but a setback or a sign of delayed success. As in when you face rejection, take notes and work on improving your business proposition and your pitch.
• Lack of self-confidence:
When faced with challenges and risks, entrepreneurs need to push forward with confidence. This in itself is half the battle won. Increasingly, a lot of institutes like – Project Management Institute, the National Institute of Standards and Technology are organizing courses on Risk Management for entrepreneurs to make them better prepared in their businesses.
Risk assessment, actuarial assessment, and analysis are important aspects, which small business owners should undertake while planning ahead.
Right from books, to software and courses, there’s a lot out there that can help entrepreneurs navigate their way through risks. With a little thought and lots of analysis, entrepreneurs can make sure that they mitigate risk and damage caused by the fluctuations in the business environment or deliberate attacks from adversaries.
It’s thus essential, that the culture of calculative risk-taking becomes ingrained into the souls of small business entrepreneurs.