Is it worth taking risks in business?
Certain people try to avoid taking any kind of risks and favour the safe route, especially when it comes to finances. Plenty of people will tell you to play it safe and to avoid making decisions which have uncertain outcomes. You may think in business when your whole livelihood is at risk this would be an understandable approach. But when you think about it, going into business in the first place was a commitment which had an unpredictable result so most business people are not scared of risks.
As Del Boy used to say, “He who dares, wins” and make no mistake growing your business will involve plenty of unpredictable consequences. There are plenty of horror stories out there of companies getting into difficulty because they took a chance and it didn’t work out. Often this is not because they chose to take a risk, but the type of risk they decided to take and how much thought was put into it.
If you are presented with a venture you need to take your time to consider it and don’t dive into the first opportunity you come across. Think over what it is you’re hoping to achieve, be it expansion, launching a new product or service or simply trying to increase sales. Whatever your aim, make sure the rewards are worth it. Always remember to ask yourself, if it ends up not paying off, how much would it set you back? If it does pay off, what do you stand to gain? Make sure to take this into consideration before making your decision.
You need to consider all possible outcomes as this will allow you to take what is known as a calculated risk. You need to have done the proper research and avoid making decisions when you’re feeling emotional. Make decisions with the evidence to back them up and with a clear head. If you’re the type to play it safe start with something that exposes you to a small loss. If it works out, you can try a greater risk next time and see greater gains as a reward. If it does not pay off, hopefully it won’t set your business back too much.
Don’t forget that it’s okay to ask for help when deciding if a venture is worth taking. Go to see your accountant or a business consultant and get expert help in the thought process. While this may cost you in the short term, long term it could mean great gains. Entrepreneurs are quite often the kind of people who are not scared at giving something a go and that is why the accounting type is usually a good comrade, both are needed, the entrepreneur to take the risk and the accountant to make sure they understand the level of risk they are taking and the implications.
Never forget that any risk brings the possibility of failure, but learning from your failures leads to a greater chance of success in the future.
Gabriel McGrath
