The Importance Of Taking Risks In Business

Founder & CEO of Clonefluence, Inc. and Cloned gg helping thousands grow their online presence with networking tactics.

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Entrepreneurship in any form is something that can seem impossible from the outside. Going on your own journey and being your own boss is a dream to many people, but they have never taken the step to release themselves from their nine-to-five. Some may fear leading their own company. And without proper leadership, startups may not do very well. In fact, they fail very quickly, with 70% of startups failing by their 10th year. However, all of your favorite entrepreneurs went out on a limb and started their journey, all or nothing, to make a name for themselves and their endeavor.

There are countless advantages that taking risks has to offer. Entrepreneurs may find a certain strategy that works for them that no one else has taken advantage of because of the significant risk involved. If you succeed in something new, then you find a strategy in your niche that works without any competitors willing to do the same, at least for a while. In my experience, companies only tend to succeed if they try new ways to build that no one else has already tried. In general, trying new things in life is a must to explore all avenues and have a sense of what is out there.

There are different types of risks, such as strategic risk, reputation risk and financial risk, that will always exist with every decision you make as an entrepreneur. Many of the things you do, say or even invest your money in can affect you long term. It is important to have a strategy when taking a risk to see if the positive outcome will outweigh the possibility of failure. For example, you notice the most strategic risk if your company begins to decline for a long period of time — companies often look to turn this around quickly and will do what is needed. Reputation risk exists when making business decisions directly affects how you are publicly known. Financial risk comes when taking out loans to support a business. These are just some basic risks that come with a business.

Something that is important for entrepreneurs to remember when it comes to taking risks is that you never know what might come out of it. This may seem scary to some, or it might be the exact motivation they need to work harder every day. Ask yourself, is my vision more powerful than the risk itself? Your idea may skyrocket and these little worries will seem like a grain of salt to you someday, or it may fail. There’s a lesson to be learned in all of risk-taking, and failure can provide an opportunity to learn from mistakes.

Taking the next step could be the right thing to make you more content with your life. You will not be able to say that you never tried because you did. Sometimes trying as hard as you can is just as satisfying as succeeding because you know you put in all of your efforts. You can never be sure how one decision may pay off, but for me, I like being satisfied with the thought of giving it my all. It’s a lot easier to settle with something out of your reach than something that you can easily just reach out and grab with a bit of effort.

When taking risks as a leader, make sure you complete your due diligence. There is such a thing as putting your hard-earned money in the wrong places, so it’s important to look out for red flags. Make sure the business or venture you are investing in or looking to partner with has very good reviews and plenty of potential.

In other words, make sure you are educated on the risks. There should be more “dos” than “don’ts” on your list when taking a risk properly. To make this easier for yourself, make a list, writing down the pros and cons of any risk you are considering to see what outweighs the other. You never truly know the outcome of a risk, but if you look into it deeply, you may be able to limit the room for failure.

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