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Risk-taking in business. This is how you deal with it.

risk taking in business

Risks surround entrepreneurship. But what not in life? If you want certainty, you definitely shouldn’t start doing business. However, if you “cannot” do anything else, it is useful to know how you deal with risk-taking in business.

Table of contents

Strong growth in the number of budding entrepreneurs

The Economic Institute for Small and Medium-sized Enterprises once calculated that 2 out of 3 people consider starting their own company an exciting career move. That will certainly not diminish in the future. 

Self-employment or entrepreneurship is on the rise! Yet, it remains a risky business; according to a Statistic Brain study, 46% of companies fail due to incompetence. Moreover, only 40% of small businesses are profitable.

A wish is not yet a choice

However, only 10% of people start a business of their own. So, that is a relatively small number. If so many people find it an exciting career step, what stops those from putting their money where their mouth is? 

Admittedly, a positive image of entrepreneurship is not yet a real wish to become an entrepreneur, let alone a choice. That’s an important distinction. Apparently, few dare to take the step to independence.

Risk-taking

Risk-taking says something about the willingness to take risks. It is about the ability to deal with uncertainty and accept you could lose money, freedom, or reputation. So, if necessary, you must be able to make your loss on time. Risk is part of entrepreneurship but is strongly related to the person who perceives it. 

For example, something may seem very risky for someone, but it is a challenge for someone else. Are you someone who mainly sees problems? Someone who raises obstacles? Do you see the risks more often than opportunities? Find out how you best deal with risk-taking in business.

Tips to better deal with risk-taking in business

  • Make a risk analysis: Write down all the dangers you can think of.
    • Don’t be humble about that, think of as many risks as possible.
    • The secret of that is you write it off you.
    • Then write about the consequences of each risk when it would become real.
    • Also, indicate what the risk is; financial, emotional, or personal.
  • Then consider every risk. If necessary, try to increase the feeling that you experience. Enhance the feeling and ask yourself: How bad is it when it would become a reality?
  • What alternative can you offer? What other options do you have?
  • Example: “I can lose my house.” Of course, you don’t want that. But how bad is it really? You can rent something smaller, maybe – no matter how bad – you could live with your parents or close friends. It only makes you stronger. There is always a solution or way out!

If you do not risk anything, you risk much more.

Dr. Martijn Driessen

Read more about what the difference between skills, abilities, knowledge, and competencies is.

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