We all carry the image of the entrepreneur as the man or woman who swims with sharks, skydives from airplanes and isn’t afraid to make big bets at the race track.
Meanwhile, you are starting your own journey into entrepreneurship. Standing on the edge of a cliff, convincing yourself to take a leap of faith and trust your business savvy.
How do entrepreneurs do it?
The risk of losing money can keep us from branching out of our comfort zone and into financial prosperity. Managing risk can be a tricky game, and there is no get-out-of-jail-free card when things don’t turn out as planned.
The Thrill Seeking Entrepreneur Myth
Here is the thing about the entrepreneur who dives with sharks: they are a myth.
Entrepreneurs don’t relish taking risks any more than the rest of us. In fact, though the most successful entrepreneurs understand that taking risks in business is the only way to grow, they take these risks with a great deal of caution and calculation.
It isn’t so much about learning to become a business daredevil but about learning to be a risk manager. In doing so, you will find that standing on the edge of the cliff feels less like a leap of faith and more like the opportunity you’ve been waiting for.
How Entrepreneurs Manage Risk
Does learning how to properly manage risk sound like learning to tame a bull? Luckily, there are a few proven tips that every good entrepreneur knows and uses as a guide for managing their business risks.
1. They don’t shy away from uncertainty
At the end of the day, there is no way to guarantee that the risk you are taking is going to pay off. But fearing risks pertaining to business can prevent you from taking any risks at all. Successful entrepreneurs learn to accept the uncertainty and think of risk as opportunity for growth and reward.
2. They become a risk-weighing scale
Learning how to weigh your risk potential for profit against its potential to fail is an important skill that all successful entrepreneurs have. You must be able to calculate the potential profit and the tolerable losses. If the loss is greater than the potential gain, most entrepreneurs will walk away from a deal.
3. They look to the future
Entrepreneurs must use their business savvy and imagination to see what could be in a world that might not have the resources to accomplish it yet. Finding new innovations or unpolished ideas are often gold mines. They just need an expert eye to unlock their potential.
4. They understand that risk is everywhere
Yes, being the CEO of your own company means that you could lose your job if the company goes under. However, layoffs happen in large companies every day as well. Entrepreneurs realize that the risk they take by working for themselves is worth it compared to the constraints of working for someone else. Likewise, entrepreneurs understand that risk exists whether you are your own boss or answering to another. So why not bet on yourself?
5. They learn how to reduce as much financial risk as possible.
The best entrepreneurs know their business inside and out, reducing risk before ever making big business decisions. They check the accounts, look at outstanding credit, seek out where their company is weakest, etc. Maintaining risk in your company along the way makes taking those business risks far less intimidating.
Becoming an entrepreneur can be a nerve racking thing. Learning and emulating how entrepreneurs manage risk is vital. Reining in your nerves can be a challenge. However, taking a chance on yourself, calculating the risks, and embracing uncertainty can lead to greater reward and pride in your work.
Start growing your business today by employing some of the tips that successful entrepreneurs use in their companies. Follow us on Facebook for more ideas and support.