It really bothers me when someone brings up the word “risk” in a negative way. Since when did taking a risk turn into something bad? I just Googled “risk definition” and got “a situation involving exposure to danger.” Really? Seems a little extreme.
Starting a business is pretty risky. Ordering day-old sushi involves a degree of risk. Hell, getting married is pretty high up on the risk ladder (there are some really crazy people out there). But are you really putting yourself in harm’s way or exposing yourself to danger doing any of these things? Ok, well maybe ordering the sushi. And I am reminded of an amazing story involving a co-worker, a vehicle in a home garage and a crazy ex. But, isn’t risk just a situation involving a degree of multiple outcomes, or UNCERTAINTY?
As business owners, it’s our job to assess risk, by looking at the possible outcomes, developing a plan or strategy to achieve the best outcome and executing that plan—thus mitigating the risk. It’s also our job to not freak out if things don’t go our way initially. If you’re a good leader and manager, you can solve any problem that arises. Or better yet, have your team solve some of those problems for you.
Taking risks isn’t a bad thing. In fact, for small business owners it’s a necessity. You took a risk opening your business and now you have to take some risks to grow your business. So why do we seem to put off taking risks?
You know you do it—when you think about taking that one big risk (or even a little one), you start to over-worry about all the things that could go wrong. You start saying things like “I can’t, because…” Instead of thinking of risks as dangerous or bad, try thinking about all the opportunities that you might gain. It’s easy to focus on the negative side of risk. But what about all the positives that come from risk-taking? Oh yeah, those.
We jump straight to “No”
I’m 100% guilty of this. In fact, it might be my process. If someone has an idea that is out of my comfort zone, I immediately say “No.” Then, I start to think about it. Is it really such a bad idea? What is so bad about it? Why do I hate this idea? Ok, I really don’t hate this idea. Could I change anything about it to make it a good idea? Ok, maybe it’s not such a bad idea. In fact, it’s kind of a great idea—with these changes. Ok. Let’s do it.
Why do I jump straight to “No”? I think there are three phases of a business. When you first start your business, you’re in the “Yes Phase.” You say “Yes” to everything because you either don’t know any better or you’re afraid to say “No” and offend people. Eventually you get burned from saying “Yes” all the time and you move solidly into the “No Phase.” The “No Phase” means that people ask you things and you don’t even think about it, you say “No” TO EVERYTHING. And you don’t care about offending anyone. And it’s awesome. But after a while, you start to think, maybe some of these asks might actually be good for my business—now you’re in the “Maybe Phase.” You hesitate to say “No” right away. But you sure don’t say “Yes.” In the “Maybe Phase” you evaluate each ask and scrutinize everything to ensure it makes sense for your business.
You can’t skip phases or rush them. Still in the “Yes Phase” and miserable? Don’t worry, eventually you’ll move over to the “No Phase” and start enjoying life again. I’m starting to dip my toes in the “Maybe Phase.” But I’m not ready to cannon ball just yet.
We don’t calculate the cost of doing nothing
This is probably the most over-looked aspect of risk-avoidance. There is an actual cost (in $) for not taking risks in your business. Sure, it’s risky to spend money advertising or offering a new promotion—but if you do nothing what will that inaction cost you?
For instance, I could spend $3,000 plus the cost of the actual ads (another $1,000+ on running the ads each month) to hire someone to help me create a Social Media advertising campaign and bring new clients to my Pure Barre studios. For me, that’s not an insignificant amount of money to spend on one method of advertising. But how much revenue could I generate from running these ads? I estimate that the year-long value of one new client who signs up for our Pure Barre Platinum package is more than $2,000. You can see that the potential gain is pretty good compared to the risk of spending all that money up front on something new. If I can just get a few new clients to like Pure Barre and take class for a year, I’ll pay for this new ad campaign. And what if I actually tested each ad to see how people were responding? Then I could stop running an ad that didn’t work or change it to see if that improved response.
If you’re hesitant to take a risk, it’s important to ask yourself: “What am I losing by my inaction?” There is a cost for doing nothing. If you don’t act, your competition will.
So, what risks will you take in 2017? Will you continue to view risk as dangerous or bad? Or will you decide to think of taking risks as a means to new opportunities? Think about it. I’m sure there is one thing you know you should be doing right now, but you’ve been putting it off. Take that risk and see what happens.
I mentioned that the one word that will describe my businesses in 2017 is “GROWTH,” so I’ll be taking lots of risks. I’ll also be evaluating each decision to make sure my business realizes a profit from those risks.
I have some bonus posts this week about why I use the Day Designer to keep my schedule organized as well as a new gift I received, a Nespresso milk frother. And I’ll also be discussing the importance of giving back—and not because it’s a tax write off, although that is nice.
Until then, stay on your toes!