How to take Calculated Risks in Business

Everything in life and in business is easy... it is people that tend to complicate things. People say to me that owning a business is too risky!! And then I explain that owning a business is less risky than having a Job (Job spells - just over broke). Why is it less risky? Well basically when you have a job you learn the skills required to complete that job. When you are a business owner you are forced to multi-skill. Business owners learn basic accounting skills, leadership qualities, marketing skills, risk management, time management and much more in addition to their initial skill. A multiskilled person will then always have many other opportunities to earn cash.

Risk is often misunderstood. For many people, they see taking risks as the last resort and often don't think the risk through, and end up making rushed decisions. Sometimes by taking risks we surge ahead in our pursuit towards our goals and dreams. A mistake most people make is they stay away from any risks and when they absolutely have to take some risk they completely expose themselves.

There are 2 types of risk - the uncalculated risk and the calculated risk. Inexperienced people take the uncalculated risk option. This is the choice or decision that they have made regardless of the consequence, the outcome is really up in the air. Anything could happen and they will just have to wear the outcome, like it or not. There is no element of control to this risk. Experienced people however take the calculated risk option because they have learnt that you need downside protection. They have calculated the outcome in the potential worst case scenario and are prepared to accept this, should they have to. These experienced "calculated risk takers" have got there by making the mistake of taking risks and quickly realised how effective it can be in their pursuit of their goals...

So what is a "calculated risk"?
A calculated risk is working out what the worst possible outcome may be BEFORE you take that risk. Don't ever make decisions and take risks, with the hope of growing your business, without giving any thought as to what you may lose if the risk doesn’t work out. You need to make sure that every decision is going to take you in a forward not backwards direction.

So you see, it really isn’t that much of a risk when properly thought out. There are opportunities out there that you could take and that could work, but make sure you do your own risk analysis first. Always do the homework... it may be tedious, it may be boring but I guarantee it will pay off in the end.