The Small Business Toolbox Blog

Risk taking is a necessary evil for the small business owner. No-one is as exposed as the owner of a small business and they often take risks with limited knowledge or experience in assessing the risk factors.

While the experienced business owner will have learnt lessons through the school of hard knocks the newbie often rushes in where the wiser fear to tread.

Small business owners often endanger their businesses and their personal financial security by being impetuous, too trusting or taking risks that are unnecessary and which they simply cannot afford to make.

Conversely some business owners are so risk averse that they fail to take up the challenge of new opportunities because of their paralyzing fear of taking any risk at all. Doing nothing is often more damaging that doing something but that something needs to have been given due thought and consideration.

Obviously a balance is what is required.

In essence there are a few things you need to do when facing risk:

First:
Gather as much information as possible so that you can make an informed decision. Ensure you are gathering actual facts, not other people’s perceptions or opinions. Unless they stand to lose as much as you do not listing to opinions and perceptions, make your decision based on accurate facts.

Second:
Weigh up the Pro’s and Con’s. Can you afford to take the risk? Can you afford not to take it? What is the best envisioned outcome? What is the worst case scenario? Can you live with the outcome? And, finally, as with all negotiations can you make an unemotional decision and survive the outcome whether it’s the best or the worst?

Third:
Having weighed up the options now Make a Decision! Procrastination is the thief of efficiency and having done the homework make a firm decision and follow through by putting the action plans in place that will give it the best possible chance of success.

As a small business owner be careful, very careful, not to make a decision and then sit back and just expect the positive outcome to materialize! Without follow through, action plans, deadlines and time allocated to the tasks the desired outcome cannot and will not happen.

Don’t sabotage your own business! Get the facts, weigh up the options, make a decision and then put the action plans in place. Do this and you’ll reduce your business risks substantially.