How to Reduce Risk When Taking Business Risks
If you already own a business, you know you have to be willing to take risks to achieve your goals. But once you’ve established your business and are successful, you may be less willing to risk what is, after all, working just fine.
However, if you just keep doing the same thing, you will end up with the same results, or possibly worse outcomes. By doing nothing different, you may lose opportunities to grow beyond your biggest dreams. If you do too little too late, you put your business at greater risk of falling behind competitors who are evolving their business offerings to expand their market.
Managing risk is a fundamental part of the entrepreneurial journey, but you want risk-taking to help you advance towards your goals, not set you back. How do you reduce risk when you’re taking risks to grow your business?
Here are four ways you can minimize risk as you pursue growth for your business.
1) Make a list of pros and cons
Convince yourself why this move is the greatest idea you ever had and then tell yourself it’s the worst idea you ever had. Put this all in writing, with pros and cons side by side.
This technique is particularly useful if you are so fixated on risk you can’t see the rewards. The idea is that when you see negatives side by side with the benefits you stand to gain, you may realize your worst possible fears are just not that bad. You may conclude the potential gains outweigh any possible risks.
Another benefit of this technique is that it forces you to be more objective by laying out the facts in writing. It’s easy to overlook the importance of a consequence if you can push it aside in your mind, but it’s much hard to deny the reality of a risk once you see it in writing.
2) Identify and work to reduce external risks
You can control most if not all risk factors within your business, but do you know what you can’t control? A benefit of anticipating external risks is that once you’ve identified them, you can explore solutions and possibly implement safeguards before you implement changes.
3) Be flexible
There’s more than one way to achieve your goal, so don’t get stuck on your first idea. Pivoting is a term that describes a strategy that allows you to change direction if your initial plan fails to advance you towards the outcomes you envisioned. The idea behind pivoting is you begin with small steps, doing what you can as quickly and as cheaply as possible, so you can evaluate your idea before you’ve gone too far down one path. Knowing before you start that you might pivot – and planning for that possibility–gives you permission to fail and try again.
4) Do your research
Talk to people who have done what you want to do so you can benefit from their experiences. Planning a growth strategy is an ideal time to consult with a seasoned business coach who can share their expertise and draw on a broad spectrum of business experiences to define concrete steps for growing your business and mitigating the risks.
If you would like to learn more about how this might apply to your business, let’s talk: