Risk-taking- A comprehensive checklist for entrepreneurs

The road to entrepreneurial success is a dead end without opportunism. And with great opportunism comes the test of risks. Here’s why entrepreneurs love taking risks and and a comprehensive checklist for entrepreneurs on how they can master the art of successful commercial risk-taking-

Education, Learning and Understanding the Real Purpose of Entrepreneurs

Without risk, entrepreneurs have no room for experience. Without having the experience of failure and feeling the joy of taking a calculated risk that turns out to be a success, a company can never grow. Only through risks, mistakes, positive and negative experiences can entrepreneurs learn how to analyze contingencies as well as plan about their future in the industry they belong in.

For instance, saying no to Steve Jobs for a billion-dollar offer can be considered a massive risk. Back when Dropbox was relatively unknown, its founder Drew Houston did just that. Houston didn’t concede defeat when Apple told him that their company couldn’t possibly handle their clouding system. But the entrepreneur and the staff took a collective risk of running independently and presently the file sharing company is one of the leading names in Internet companies, with its value estimated to be around $9-12 billion.

Don’t Miss the Chance to Be a Leader

In general, entrepreneurs like taking risks because it allows them to go a certain level up against their direct competitors. Leading companies, ones that can be truly considered to be successful pioneers of their industry, change the existing ways of how their industry runs for the better, putting their own interests on the line. This doesn’t mean that all entrepreneurs have to take major risks recurrently, but whenever there is an opportunity to capitalize on, leaders mustn’t be afraid to take big decisions.

For instance, buying organic products was a concept not considered seriously at all in the food industry back in the early 90s and 2000s. Why is it so now? Four Texan leaders, Renee Lawson Hardy and John Mackey, then titleholders of Safer Way Natural Foods, and Mark Skiles and Craig Weller, proprietors of the Clarksville Natural Grocery, decided to revolutionize shopping markets by creating Whole Foods. In 1980, they started with just over 20 employees. Since then, their risks have paid off and they have successfully remodeled the whole culture of eating healthy and grocery shopping for healthy food items.

The Art of Calculated Risk Taking

Calculating the possible results is the only way to successfully implement a ‘risk’. Having contingency plans in case of a failure is also a must. Whereas there are countless victory stories of business magnates taking massive risks relative to their existing market conditions, no risk can be as foolish as taking uncalculated risks. In 2001 when Pandora was completely broke, the CEO and founder of the company Tim Westergren asked 50 of their best employees to suspend their overall wages for 2 years. In less than two years, the company managed to attract investors and return to its formal glory. The message for entrepreneurs from their predecessors is clear -“Learn how to take calculated risks”.

Summary

Many entrepreneurs love to take risks, because risks do pay off. By taking risks and learning from mistakes and negative situations, entrepreneurs become experienced in the long run, which is a boon for the future of their companies. However, to gain a strong foothold amidst competition, it is important to take calculated risks.

Reshali Balasubramaniam

Head of HR, HR Counselor and adviser at https://work.lk/. Do you offer a Service? Signup for an account at work.lk