Risk- Taking Ability in Business – Are you a ‘Calculated Risk-Taker’

In our last 2 blogs, we discussed the fear and confidence as integral parts of Business. In this session, we will be talking about one of the most important factors in Business – Risk Taking.

We often hear of success stories of entrepreneurs and businesses who were bold enough to take risks for something which they wanted to achieve. On the other hand, occasionally, there comes a story of a risk going southwards. So how can a determination be made regarding which risk is worth taking and which is not? Not considering the luck-factor, which some may point out as a reason for people’s success, a closer study of behavior pattern reveals that a person can significantly increase his “luck” by understanding the science behind Risk-taking.

Risk-taking can be considered almost synonymous with Business. Substantial growth can come only by taking substantial risks. A high level of decision-making, as well as sacrifice, is required at every stage in business. The question, however, remains if the risk of sacrifice is worth it.

We often come across a term – Calculated Risk. It may be defined as a hazard or chance of failure whose degree of probability has been reckoned or estimated before some undertaking is entered upon. Calculated risk is nothing but forecasting of consequences and deciding whether one can afford the losses if things don’t go according to plan. It is always a simple calculation of whether the profits gained in the transaction are worth the losses incurred otherwise.

Following are a few risks which an entrepreneur is bound to face in his business:

-          Financial Risk: In the end, it all comes down to the finances. An entrepreneur, especially in his early days, must face the risk of managing his money and be ready to incur financial losses.

-          Risk of Employee Retention: Businesses always have a problem retaining their old employees and creating a core group. Also, when an employee resigns from an organization, he takes valuable knowledge about the company with him.

-          Risk of External Competition: As a business, this is one of the biggest risks which can hit a business. To counter this, an entrepreneur needs to always be proactive in his approach and be updated with the world outside.

-          Statutory Risks: An entrepreneur must always be prepared for unforeseen circumstances as well. However, in this scenario, there are most of the times, if not always, indicators about the upcoming changes, what needs to be done is to keep an eye out for the changing trends.

Some risks are unavoidable, where as some can be avoided and played safe. However, for those who are willing to take the risk, the fruits which they bear are way sweeter. To leave you with a thought, there is an old Chinese proverb which goes

“Everybody wants to be a Diamond.. but very few are willing to get cut!”

BUSINESS CONFIDENCE

Confidence comes not from always being right, but not fearing to be wrong.

- Peter T. Mcintyre

Confidence is something which we hear about every day. In a way, it can be considered as one of the fundamentals of the mental state of a human being. Whatever we do, our confidence in ourselves is what drives us. However, What is business confidence? What drives a business to take decisions, risks, and actions based on their confidence?

Business Confidence is something that quantifies the amount of positive energy or optimism the business owners carry of their companies. This quality of a businessman overpowers all the other qualities of successful businessmen. If a businessman is passionate, focused risk taker, but lacks in confidence, he will never succeed. Every activity a businessman performs, be it a product launch, B2B meetings, business decisions need some level of confidence. 

So, if a businessman is expecting a great level of achievement, he needs to be sure about himself that he is worth it. 

Some tips which can help in boosting the confidence :

1.The first impression is the last one: Our appearance plays an important role in building our own confidence. Right from our attire, to our words and conduct, a confident personality leaves a lasting impression on the person in front.  

2.Focus on the outcome: Imagine the beautiful result you are going to achieve. That will automatically drive the process. In your mind, keep telling yourself that the success is meant for you and only you and will come to you automatically. When we focus on our goals, it gives us confidence in our actions and decisions.

3.Small mistakes are acceptable: Always remember that you are not God. We all are human beings, sometimes mistakes are meant to happen. As long as you are able to show a bigger picture, smaller mistakes won’t matter. However, should be kept to the minimum possible. 

4.Have the courage to hear and say NO: It is not possible that you will be able to sell your products or services to everyone you meet. People are going to say NO to you. Let that not discourage you. Always tell yourself that when you hear NO, you are one more step closer to YES. That YES should motivate you to move forward. Similarly, if a person in front is asking for something unreasonable, learn to say NO. No harm. Always focus on the long term relationship

5.Practice: Confidence is just like a muscle. It gets stronger and stronger when practiced. Instead of using it when the need arises, practice in every way possible daily.

However, one has to remember that Confidence is something which can be acquired through focus and concentration as well as through our external support system. Small steps can lead to a metamorphic change in your personality and soar your Business to newer heights.