Risk is inherent to innovation and creativity, which are elements essentials to entrepreneurship. Risk-taking takes guts, passion and a willingness to succeed. Entrepreneurs have an appetite for risk-taking but does it imply jumping blindly into an abyss without taking into account irrevocable consequences? Of course not.
Risk taking is a term that may send chills running down an individual’s spine as he looks for the nearest exit. However, when it comes to entrepreneurship, risk taking is inevitable. Sadly, as unavoidable as this aspect is, it is often misinterpreted. This week, we will shed some light on the extent to which risk-taking is acceptable and the effective way one should tackle risks.
Entrepreneurship is immensely rewarding but also comes with a bunch of risks. When a start-up is launched, the stakes are high. You put your financial well-being, emotional heath and career opportunities at risk and when so much is gambled, one cannot afford to go on a wild adventure just for the fun of it. Any entrepreneur, no matter how experienced he or she is, will never recommend that you plunge into the waters without evaluating your chances of survival.
While risk-taking is non-negotiable in the context of entrepreneurship, it is of paramount importance to understand that one does not become an entrepreneur by just taking risks. Entrepreneurs are not wild speculators. Instead, they are pragmatic risk-takers with a firm belief that they will make things work for themselves.
Entrepreneurs are people who do not hesitate to take routes others cannot even imagine. When the road washes out in front of them, they forge new paths to reach success but that does not imply that they imprudently indulge in wild expeditions with nothing besides regret to come out of it.
While the propensity to take risk is a commendable trait that entrepreneurs have, the desired success and growth can only be accomplished by assessing and evaluating a prospect and then exploiting it. An entrepreneur is willing to explore unfamiliar territories. What others view as a threat is seen by an entrepreneur as an opportunity with a rational possibility of failure. Others may cringe at this possibility of failure but true entrepreneurs are those who are willing to play the game the hard way. This is because they want to take the risk to create success that they sense is coming.
Superficially, this may seem like a desperate or hasty measure but on the part of an entrepreneur, he makes a decision only after thoroughly evaluating the consequences. As part of this process of analyzing risks, the entrepreneur takes the necessary steps to minimize the possibility of failure bringing to life the notion of ‘calculated risk-taking’.
It is imperative to understand that there is no such thing as a fool-proof idea. Even when minimal, risks are always present but the thin line that demarcates ordinary individuals from entrepreneurs is that ordinary individuals try to mitigate as much risks as possible. Only after they are sure that the probability of risk has been significantly reduced will they undertake an opportunity. This approach may work perfectly for a company in its development stage but for one in its infancy, it won’t get a start that will lead to success.
Entrepreneurs, on the other hand, take the possible risks into account and then after addressing some of those risks move ahead with the idea. This is because they take up seemingly impossible tasks and address risks as they move along. True entrepreneurs do not allow risks to deter them from their path to success and refuse to give in to any risks that have been identified but have not been addressed yet.
Entrepreneurs do not go ahead with an idea when they know that countless obstacles and risks lie ahead of them. They resolve just enough risks that their movement ahead is not interrupted or ceased. They keep an eye on the risk factors but refuse to let them threaten their chances of success. Nothing discourages them from going ahead with an idea if they feel that the risks identified are something they can live with.
All in all, risk-taking in the context of entrepreneurship is a bold move. While risks should not discourage an entrepreneur from making the first move, only when this risk-taking is calculated will it be possible for any business to reap the desired profits and success.