“Anyone who has never made a mistake has never tried anything new.”
-Albert Einstein
We all make mistakes, especially in business. But to repeat those mistakes is another story. Making mistakes are important. It is how we learn and improve as business owners. In business there will always be risks involved. But sometimes you must weigh the risks vs the rewards to see if that risk is even worth taking. But how do we do that? How do you discern whether those decisions foolish or calculated? Let’s first define a calculated risk. A calculated risk is a carefully considered decision that sheds light on the degree of personal and financial risk involved counterbalanced by the possibilities of benefits. Basically, is it worth it. That’s a big oversimplification though. Here are our tips on how to make calculated risks.
1. Research. You will need to know every single minute detail of an opportunity.
2. Evaluate opportunities critically. How can this new venture lead to new leads or revenue? Is the timeline reasonable? It’s important to also set ROI that is reasonable. Step outside of your emotions and evaluate these opportunities as if you’re giving your friend advice. What would you tell them?
3. Healthy boundaries. It’s ok to say NO. Sometimes it won’t make sense to accept a really good opportunity if its pros don’t outweigh its cons and that’s ok. Saying no to some so that you can say yes to the really perfect ones is key.
4. Set goals. If you don’t track how your new ventures are going, how will you know if they’re succeeding? The answer is that you won’t. it’s important to set milestones and over goals for your risks that your taking. This will also help you understand where you may need to pivot.
5. Have the right attitude. It’s important to be able to roll with the punches sometimes as an entrepreneur. Stubbornness will get you nowhere in any business. If something isn’t working you have to try something new. It’s important to understand when to act and when it’s time to walk away.
Knowing that there is nothing wrong with making mistakes is business is part of understanding what it is to be an entrepreneur. Good leaders do not let fear get in their way of exploring uncharted territories. You shouldn’t be so conservative that you play it too safe and never take any chances. This is a good way to go out of business. Innovation breeds success and therefore, requires that you stay on top of current events and trends in your field. This will also help you see where new business opportunities may lie. No matter what way you spin it, if you follow these tips to calculate your risks you’re at a good starting point. Make sure that you do ample research to know exactly what the calculated risk versus the reward will be. The more prepared you are the better.
