Originally published October 18, 2011
Entrepreneurs, like most true leaders, hold the distinction of taking considerably more risks than most other people. It is a mark of their ability to lead people and to run successful businesses. If you don’t believe that fundamental truth, think about people you know who have been successful at what they do. What sacrifices have they made to get where they are? What mistakes or failures did they turn into learning experiences? Ultimately, what risks did they take to effect desired outcomes? The Pennsylvania Department of Revenue describes risk-taking as the ability to “abandon status quo, explore options, and pursue opportunities.” For budding business leaders, it is the key to professional growth by willingness to understand the unknown.
Personally, I’m a borderline risk-taker. As a business leader and community advocate, I take certain risks every time I interact with clients and community stakeholders. Still, there are missed opportunities resulting from my erring on the side of caution. As an entrepreneur, I afford myself very little room for missed opportunities, and one of my goals is to replicate that fearlessness in other decisions I make outside the business arena. In short, I want to be the risk-taker in life that I have been in business. How can I do it?
Taking risks requires letting go. Letting go of fears. Letting go of status quo. Letting go of choices with adverse consequences. Letting go of relationships that don’t foster personal and professional development. In life and work, we develop habits, make friends, get comfortable, form biases. In business, letting go of these accounts for much, particularly when it comes to taking business ideas to the next level.
Taking risks means creative exploration. Creatively exploring new ideas. Exploring new methods. Forging new relationships. Sharing new insights. Building new teams. Business owners have to be willing to trust others with crucial parts of their business ideas and plans. Trust takes more time to build than to lose, and once trust is lost, it takes even longer to rebuild, if ever! Learning to trust others to help blossom ideas and plans is a risk, one that savvy business owners navigate with skill over time.
Taking risks involves going for it! Going for that contract. Going after new clients. Going forward with plans. Too many ideas die before they make it into the light simply because their originators don’t have the drive, the persistence to see things through. Leaders of all kinds recognize that they will have to make some sacrifices and keep after their ideas. Business owners, in particular, learn to stick with their plans through the roughest conditions to see their ideas become business successes.
There are many risks out there for people starting their own business, and poor economic times do little to levitate the fears connected to these risks. Still, there is hope. Learn to face fears and tackle those risks! Look at an example from a recent client with whom I’ve worked on and off to launch their business idea since this past summer.
Three partners came to me with an idea that they researched extensively and decided among themselves to be unique for its industry. They took their first risk in sharing their idea with a consultant who has deep, close ties in that industry. (Nothing to fear, as my firm emphasizes consultant-client confidentiality in all our cases.) This was a risk they were willing to take because they recognized that they only way they could grow this idea into a business was to seek help with the stickier areas of starting and managing a business.
Once we started working together, I warned them about other risks they could face in the near future, including interpersonal disputes and partnership conflicts. This is another risk they accepted and prepared themselves to combat. Their task was to devise a formal agreement outlining specifics of their partnership to avoid verbal fallouts later.
Next, we together discovered other risks involved in getting this idea off the ground. Risks like having to invest time, energy, efforts, and money on which they would not see an immediate return. This risk didn’t go over so well with the three of them. Shortly after discussing options for dealing with this kind of risk, our meetings seemed to stop altogether, and I heard very little from any of them for a while. In recent weeks, they seem to be picking up the pace, little by little, and it may be another few weeks before enter into a formal consulting arrangement again. (In the meantime, I have recommended they contact SCORE through the Free Library of Philadelphia. That’s a great – read: FREE – source of professionals and experts who can help small business entrepreneurs launch their ideas.)
Finally, as recently as this morning, I had the unfortunate task of making a firm recommendation that isn’t easy for anyone to make or to follow. Still, what was said had to be said, and it carries – drum roll, please – its own set of risks for the partners to work out together. Hopefully, the three will decide together what is best for the development of their really smart idea into viable business plans. How will they do that? They will have to continue to take risks, letting go of what they think they know, looking into new ways of doing things, and chasing their dream into an exciting reality.
And what about you? Where do you rate yourself as a risk-taker? On a scale of 1 to 10, 1 being deplorable and 10 being exceptional, what kind of risk-taker are you? Take that first bite out of your fears and answer honestly. (Facing the truth is a first step toward taking reasonable risk to effect desired outcomes.) Share your thoughts, ideas, insights, and experiences in comments. Don’t hold back. Help others by letting them learn from what you have to say about risk-taking. And then come back Thursday for a briefing on persistence. Happy risking!