As you work hard to grow your business, you will naturally face uncertainties along the way. Am I generating enough capital? Are my overheads manageable? Am I scaling too fast? Do I have enough staff and can I afford them? When your plate is this full, it’s natural to resist adding additional pressure and stress. This is why many people take the safe route and avoid taking risks. But we think that’s a mistake, and here is why!
As a small business owner, you’re constantly juggling. Add to that a tight budget, key person issues, and a tendency to spend too much time working for and not ON your business and you’ve got yourself a recipe for stress!
Using this as an excuse to avoid taking risks is certainly understandable! But with 60% of new Australian small businesses likely to fail within their first three years of operation, taking risks may just end up being what saves you.
How can you shift your mindset to see risk taking as competitive advantage instead of corporate failure? We’ve put together a list of cold hard business truths to get you part of the way there. The rest is up to you!
Risk taking is part of being in business
Just going into business for yourself is risky! So, it should already be in your nature to embrace them. But what are the kinds of calculated business risks you need to be taking as a budding entrepreneur? Here is a short list of 5:
- Market Risks – The market is always changing, and you should too if you want to keep up. Always be learning, researching, and staying one step ahead of the market trends.
- Competitive Risks – There will always be someone ahead of you and behind you. How do you remain competitive? By taking risks! Just ensure you know how you stack up against your competition so you can mitigate any potential losses.
- Brand Risks – Customers are brand loyal with the majority preferring to buy from brands that they are familiar with or like. A new product or service could drastically affect your brand’s credibility, so ensure you do your market research.
- Technological Risks – Investing in technology can sometimes seem like you’re simply throwing money away. But up to date and reliable tech can be worth that risk if it results in better user experience for your customers.
- Financial Risks – Choosing the right investors is a calculated risk worth taking. Make sure you are getting good and impartial advice in this area though.
You can be a leader in your industry
If you want to build a thriving successful business, you must distinguish yourself from your competition. And having a unique selling point or position is how you do that. Why should customers buy your products when they can get the same thing from your competitor? Why is your service so much better than the next persons? You’ll only find your unique position through trial and error, and there is definitely risk in that process. That said, you’re taking a risk doing the alternative as well! Simply following the leader and blending has been the downfall of many business before you.
With risk taking comes innovation
If you want to grow your company, you must be innovative. Customer demands will change over time and you need to be ready to adapt. For example, most everyone likes vanilla ice cream. But, what if you could make ordinary vanilla ice cream sensational? A new recipe that not only tastes better but cuts costs? A new design that ensures the ice cream remains a perfect consistency? Not only could you gain a higher market share, but you could cut your competition down in the process.
Sounds great, hey? But unless you’re a Michelin starred chef, the chances that you’ll get this new recipe perfect the first time are slim. There will be plenty of versions that end up in the bin before you settle on the one you like. This same analogy works in business – just with a more expensive shopping list!
Calculated risks = Higher personal satisfaction
Have you ever had a great idea that you thought was a game changer, but you didn’t pursue it because you were scared of the risk? What if taking that risk could have propelled your company from ordinary to extraordinary? Always wondering “what if” can play havoc with your confidence if you’ll let it.
The truth is, even if things don’t pay out the way you hope, taking these kind of calculated risks provide you invaluable business experience. Which can actually equate to higher levels of satisfaction in your personal and professional life in the long run!
You learn from failure
Even if taking a risk did not turn out as planned, it will have been a valuable learning opportunity. Why didn’t it work? What can be done differently next time? Though it may seem like a failure at first, you are actually now one step closer to success!
Instead of equating your failings to money lost, look at them instead as knowledge gained.
Success in business can sometimes just be about having the right growth mindset. Don’t know what that is? Read more here. But for now, know that those risks that you’ve been avoiding might actually be the one thing you need to do to take your business to the next level. But you won’t know until you try!
At Oracle Tree, we are passionate about helping small businesses grow and make an impact. If you’re struggling with mindset or need some help with your growth strategy, why not book in for a free 20 minute strategy call? Click here to make a time with us now!
