Risk-taking is a part of entrepreneurial life. Business owners must know when to seek loans, when to expand, when to risk a steady salary in favor of self-employment and how to judge the potential benefits of taking a risk. Most entrepreneurs are risk-takers by nature. Many entrepreneurs risk all that they have when they decide to launch a business.
For entrepreneurs, there is no secure monthly income, and spending time with family can be a challenge. Entrepreneurs have to have a risk-taking spirit, because not taking risks can kill a business before it gets off the ground. But they have to balance that impulse; excessive risk-taking can destroy a business and its owner’s credit, finances and personal life. An entrepreneur will need funds to launch a business either in the form of loans from investors, their own savings, or funds from family. The founder will have to put their own “skin in the game.”
For entrepreneurs, one of the necessary skills is being able to take calculated risks. When you’re starting your own business, it’s going to be risky by default, because there’s no guarantee you’ll succeed. You need to take some risks if you want your business to thrive. For entrepreneurs, taking risks and business growth go hand in hand. Entrepreneurs take risks on a regular basis, no matter how big or small they may be. This is not to say that entrepreneurs take risks just for the sake of it – successful risks are calculated and based on an underlying motivator.
Taking risks is scary, whether you’re going all-in during a friendly game of poker or quitting your long-time career to pursue one of your promising business ideas. If you aren’t prepared to take risks, you have no business being an entrepreneur. Entrepreneurship is fundamentally linked to risk-taking. You’ll need to invest some of your personal capital into a growing business — in most cases. You’ll stake your reputation on an unproven idea.
You’ll sacrifice a steady paycheck for the first several months to a year — again, in most cases. While you can be irresponsible in your risk-taking and need to be careful, that doesn’t mean you should avoid any risky investments or ideas. You need to embrace risk as an entrepreneur, as long as you do so in a responsible and informed way. While you can be irresponsible in your risk-taking and need to be careful, that doesn’t mean you should avoid any risky investments or ideas.
Based in Gujrat, Dhrumil Soni says you need to embrace risk as an entrepreneur, as long as you do so in a responsible and informed way. Good planning and meticulous financial management can help an entrepreneur determine which risks are sound and which are not. When necessary, business owners should hire experts to help them make decisions. An attorney, for example, can advise about the legal risks of business decisions.
Some of the most common reasons for risk-taking
Risks can be calculated
When taking a major risk, it is important to calculate the potential results and have contingency plans in place. While there are success stories of entrepreneurs taking the ‘ultimate’ risk, no risk which could see your business go completely under is advised.
You don’t know unless you try
When it comes to business, maybe your company is doing alright. You’re making ends meet and you’re an entrepreneur, so you feel good. However, there’s likely a chance that your business could be doing much better and as an entrepreneur, you can envision it. Without taking a risk, you’ll never know how great your company could be
You’ll always learn from it
You’ll learn something valuable when you take a risk, regardless of whether you succeed or fail. Even if you fail with your risk, learn from the experience.
It is a chance to learn
Without risk, entrepreneurs will not experience failure and therefore will not learn from their mistakes. Of course it is possible to learn from positive experiences too, however, failure teaches us a very powerful lesson that tends to stay with us for life.
The drawback of a risk is failure that costs something — money, time with family, credit, perhaps even the business. Failure of this sort can raise questions about whether the business owner can accurately assess risk. Business owners who take risks recklessly may lose the trust of their employees and customers.
You will often hear about / read about the 1% whose big RISK-TAKING resulted in great success, fame, wealth, etc. But you will RARELY hear about the 99% whose big risk-taking led to failure — accompanied by stress, anxiety, regret— or worse! It’s critical to understand that by not taking risks, we might end up losing once in a lifetime opportunities. Therefore, you need to stop overthinking what might go wrong and concentrate on where you want to be.
“Risk-Taking” has basically become an entrepreneurial badge of honor. The greater the initial risk, the cooler the retrospective story — if, If, IF the story ends up being a SUCCESS story!