There’s no way around it: You must take risks in life if you’re looking to grow. In the entrepreneurial world, these risks can be inherently linked to the way you run your business and subsequently impact the outcome of your business’ success.
Taking risks is scary, but many note they are happier with the risks they took that didn’t turn out the way they wanted versus the risks they never went through with. Below, a panel of Forbes Coaches Council members explain the ways entrepreneurs can be responsible about their business risks and minimize any potential negative impact.
1. Dip Your Toe In Before Jumping In
One way entrepreneurs can be responsible about their business risks and minimize any potential negative impact is to test their idea before rolling it out. You can't predict how compelling your idea will be—people are not predictable. For example, if your idea is a nationwide workshop tour, test it in one location first. Have evaluations at the end to get feedback; if they love it, roll it out. - Elizabeth Ruiz, EAR Enterprises
2. Take Advantage Of Good Opportunities That Come Your Way
One of the most important things entrepreneurs can do is to be sure they are taking risks. When you eliminate all risk, you'll be certain, but stagnant. Smart risk-takers notice and take advantage of opportunities, even when there's a chance of failure. Opportunity offers the possibility of growth and development. Calculated risk-taking minimizes the downside and maximizes opportunities. - Kate Dixon, Dixon Consulting
3. Actively Explore Worst-Case Scenarios
In complex environments, we need to take “safe-fail” risks, where the downside may be unfortunate but not devastating. Consider the worst that can happen and how you’d respond. Ask others the same question, because they’ll have perspectives different from yours. Take reasonable chances that you know you can recover from. - Dr. Joel M. Rothaizer, MCC, Clear Impact Consulting Group
4. Create Backup Plans
Taking risks is an opportunity for growth. Taking calculated, strategic risks is an opportunity to shine! Even with an impeccably, well-thought-out business plan, business happens! Having a plan A, B and C with the pros and cons of each may mitigate some risks when the necessity of making a decision arises. A written plan can provide an entrepreneur with a sense of direction when storms arise. - Dr. Melissa Weathersby, 5-Star Empowerment
5. Admit Your Mistakes
We all make them. No one is perfect. Some risks will pay off. Others will drain you. Know what you can afford to lose (in money, time and other resources) and track the metrics. When things cross the red line, admit the error, stop the downward decline and learn the lessons you can from it. This means you made a mistake. Maintain your leadership credibility. Admit the mistake and move on. - Brian Gorman, TransformingLives.Coach
6. Start Small To Achieve Proof Of Concept
Innovation, and even scaling a business, is inherently a risky proposition. One of the most time-tested ways of managing the risk is to start on a small scale to achieve "proof of concept." Though it doesn't magically eliminate all the risk, proof of concept will allow for proper analysis and preparation for larger rollouts. - Kamyar Shah, World Consulting Group
7. Make Operational Risk Management An Everyday Occurrence
Managing risk is an essential task for operational success. A responsible leader creates a culture that identifies and assesses risk on a continual basis and makes risks decisions based on the mission, core values and priorities of their organization. Entrepreneurs can minimize potential negative impacts by making operational risk management part of their normal daily and/or weekly operating rhythm. - Dennis Volpe, LRI
8. Know Your Risk Profile
Know thyself. Do you run risk-averse or reckless? The risk is not the issue—it's how you relate to it. For example, most people start new businesses without having a budget that plans a way to profitability. Many risks can be mitigated through that process. On the other side, risk-averse people often stall because they want more information than is reasonable. Know your pattern and track it. - Josef Shapiro, Clear and Open
9. Engage A Great Mentor
Engaging with a formal mentor who is a well-matched, experienced business leader can be the perfect sounding board for balancing risks and their impact. Too often, entrepreneurs try to go solo and miss out on the many ideas, resources, pieces of advice and guidance of those who have been in their shoes. There is no shame in asking for help and relying on a qualified mentor for support on risk management. - Jill Hauwiller, Leadership Refinery
10. Seek MVP Status, Then Scale
Seek first to design your "MVP," which is your Minimum Viable Product. The MVP can be anything—a product, service, event, new business, new geography, etc. Design the solution set, test it in a limited, isolated, lower-risk fashion and work to secure successful "MVP status." When you have the specifics nailed down in a repeatable model, drive forward with growth and scale with confidence. - Mark Nation, Nation Leadership
11. Create An Internal Risk Assessment Before Taking The Leap
Be sure that the risk you are willing to take is still in alignment with your company values. When a risk is too great, it will feel “off” versus exciting. Be sure that every risk is run through an internal assessment. An assessment will help you quickly avoid making emotional decisions, minimize stress and will help bring alignment into focus. Avoid taking big risks with other people’s money. - Cheryl Amyx, 4CEO, Inc.
12. Ask Others Who Have Been Successful At What You Want To Do
Get a lot of advice from people who have done similar things, have been successful and don't have an agenda other than to support you. Consider every possible downside to your brilliant idea and, if you can mitigate the impact or live with the possible outcome, then take the chance. Most regrets come from not trying out a great idea that got away. - Rebecca Lea Ray, The Conference Board
Source: This article initially published on October 3, 2019, on Forbes here.