Being a risk taker in business is not the same as being reckless. Nevertheless, the word “risk” has a negative connotation to most of us, implying danger and possible loss. For true entrepreneurs, risk is viewed as a positive, with its implied challenge to overcome the unknown and hitting the big return.
In fact, risk is an integral part of life, as well as every business, yet so few people learn to manage it properly, or even want to think about it. One way to learn is to understand better how successful entrepreneurs approach risk, and look at actual strategies they use for success.
I found a great summary of key strategies used, with life stories, in a book titled “The Risk Takers,” by Renee and Don Martin. Here is their list, with a little prioritizing and comments of my own:
- Spot a new trend and pounce. Often, a shift in cultural or economic trends will create new entrepreneurial opportunities. The challenge is to recognize the shift early and then act on it, despite the risk. This is the origin of the “first movers” competitive advantage.
- Go on a treasure hunt and find an under-served niche. Even a huge multi-billion-dollar company can’t offer everything for everyone. There is nothing more exciting than finding a lucrative market that everyone else has failed to spot or target.
- Exploit your competitor’s weakness and make it your strength. The sharpest entrepreneurs have a knack for viewing the world from the perspective of their customers. That quality can help you capitalize on competitors vulnerabilities and shortcomings.
- Hit ‘em where they ain’t. Whenever possible, set your sights on areas that your competitors have neglected or ignored. It’s easier than dislodging well-recognized existing products, and waiting for customer change, even if your solution is better.
- Buck the conventional wisdom. Many entrepreneurs profiled in the book succeeded in large part because they veered away from established formulas and ways of thinking. Challenging convention can open the door to competitive advantage.
- Save your bucks and get notice without expensive advertising. If your startup business is on a tight budget, there are creative ways today to get customers’ attention without traditional advertising. Start with social media, blogging, and word-of-mouth.
- Never let adversity or failure defeat you. The ranks of successful entrepreneurs are filled with men and women who refused to stop believing in themselves, despite the derision of others or heartbreaking failures. Persistence and resiliency lead to success.
- Trust your gut. An expanding body of research confirms that intuition is a real form of knowledge. It’s a skill you can develop and strengthen – one that’s particularly valuable in the most chaotic and fluid business environment. At such times, intuition often beats rational analysis.
- Never stop reinventing your company. Top-performing entrepreneurs make it a point to give their business a major overhaul now and then to keep pace with changes in the marketplace. Complacency in business is like a slow leak in a tire. By the time you notice it, the damage is done.
- Just start! The “perfect” time for a business launch will never present itself. More often than not, waiting just gives would-be competitors the opportunity to beat you to the punch. If you truly believe your idea will succeed, then take the risk and just get started.
We have always been a world of entrepreneurs, and if we are to rebuild our economy, we must reinvigorate the culture and mindset that have built that tradition. Believe in the power of your ideas and just start the pursuit of your own entrepreneurial dream. With intelligent risk, you too can succeed.