Risk taking is a skill possessed by the savviest entrepreneur. Research shows that entrepreneurs who take risks are more likely to succeed. Many individuals have a great creative ability to formulate wining business plans and ideas, however they fall into the trap of questioning their likelihood of success, causing a great ideas to become discarded as they feel it might be too risky. It is human nature to fear the unknown however it is vital for individuals to overcome this fear when in the business environment.
Many businesses reject high risk ventures without giving them a chance. Playing it safe might seem like a very sustainable business methodology, however failing to push the norm and create unique products and services will make it difficult to distinguish your company from your competitors. Businesses in these situations often get left behind their competition, until eventually there last chance is to risk their existence on something unique in order to attempt to get back on top in their market, by which point their resources are depleted on trying to stay afloat. Businesses cannot afford to wait until their business begins to dwindle before they work up the courage to take some risks.
Most business employ risk management techniques to aid them in there decision making processes. Potential profitability if compared with costs showing which path contains the lowest risk with the highest return. While this prioritising is an effective strategy, it should not be used on its own. Often the most profitable ideas are the ones that are the riskiest and through this form of risk management one would never be able to take advantage of them. Splitting your budget where a small amount is devoted to the high risk ventures while reserving the majority for your standard low risk, high return ventures will open your business to the vast potential presented by high risk projects while providing the security of the low risk ones.
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