People take risks all the time. Jaywalking is one simple example; you see the cars coming but you assess that there is enough time for you to get out of their way. So how can you apply these same successful risk-taking principles to your business? And should you bother?
Risk vs. Calculated Risk
The most successful business leaders understand that continuing on the same path for too long is a recipe for stunted growth and falling behind in your industry. Take popular streaming service Netflix as an example. They continue to take risks on original content with the knowledge, not every series will take off. They’re not afraid to cut out the ones that aren’t performing, even if they have loyal followings - such as Sense8 which was cancelled due to expensive production costs despite fan outcry at the decision. Their ability to understand that not every risk will pay off and their willingness to cut losses on an under-performing risk are what keep their model thriving.
If the definition of risk is being exposed to danger, then is there such thing as a good risk? The key is in the syntax; taking a risk is never going to be danger-free but taking a calculated risk brings a higher chance for rewards. By calculating the outcomes you are lessening the potential harm and increasing your odds of a positive outcome.
6 Tips For Successful Risk-Taking
- Find solutions for the negatives
The calculating part of a calculated risk means you’ve considered all the possible negative outcomes and have found solutions. If you can see a way out of the failures associated with the risk you’re taking then it’s not a bad choice.
- Think long-term
What happens if your risk pays off? What happens if it doesn’t? The best plans are the ones which look at the long-term effects or outcomes of a business decision. There’s no use working toward one immediate goal without considering next moves. If it works you’ll need a solid plan for next steps and improving on your new product or business model. If it doesn’t, you’ll need to know how you’re going to bring back stability before jumping in on the next opportunity.
- Be prepared to adapt
Even with a plan in play we can’t be sure of the future. Research diligently but also recognise that there are going to be surprises. Anything from unexpected financial losses to a flooded office that holds up days of work could change your straight path to a bent one. The ability to adapt when this happens will keep your ideas afloat.
- Be smart on saving money
If there are large financial burdens associated with your current venture you may be tempted to reduce the costs to get it off the ground. Skipping quality checks and implementing cheap labour, such as interns and inexperienced employees, will save you money but they’ll also add to the risks. Focus instead on saving money in other areas of your business like finding deals on furniture
to decorate the new office. This way you’ll be able to financially back your calculated risk properly and increase the chances of its success.
- Run a test
Staying ahead of competitors tempts you to launch products and ideas quickly but untested ventures will be rife for poor reviews. Good reviews from customers are a cost-effective marketing strategy that you’ll only achieve by launching a well-tested product. Launching too soon and failing will only teach your competitors what not to do when they follow in your footsteps. Take the time behind the scenes to sort out every kink first.
- Seek feedback
The closer you are to the idea the more afraid you’ll be of people poking holes in it. But a well thought out idea shouldn’t have many holes. Constructive feedback from trusted business partners is an important final step in the process before investing serious time or money in your decisions.
About the Author
Julia Hammond is a Melbourne based lifestyle blogger who currently publishes weekly content over on the MyDeal.com.au blog. She can also be found guest posting on great websites and loves to write about all things work, life and health.