How To Embrace Risk In Business The Easy Way

By Aaron Morton, - In Peak Performance

Picture of a handsome yung man showing us how to embrace risk in business

Photo Credit: stockphotosecrets

My dive into self-employment came four years ago when I proudly walked out of my mind-numbing office job armed with a plan I thought was bulletproof. After a month, I had no clients. I sat in my flat at 10.30am on a rainy Monday morning wondering what the hell I’ve let myself in for and whether I’ve just made a massive mistake in leaving my job.

4 years on, I’ve learnt a lot in my business and through working in therapy, coaching and personal fitness training. I’ve also discovered a lot about how humans deal with risk and what allows some to ride through the storm of failure and setbacks.

Introduction

The risk-resilience loop is a term I use to describe the process people go through to pursue any goal. Let’s be honest, as business owners our visualisation of choice is where we are successful, money rolling in and making a huge impact in the world.

This is understandable when you realise there is a little known brain bias called survivorship bias that simply states that ‘we focus on the successes of the people within our domain and overlook those who have failed, thus overestimating the probability that we will succeed’.

For every success, there has been a process that came before it, and you can be sure there were setbacks, failures and airborne chairs.

When I work with clients, one of the questions I ask is how often they engage in pursuits they consider to be risky. This can be any activity that makes them a little nervous and a chance they may fail.

If they succeed, it brings them closer to a larger goal (increased exposure, income, expertise), but if they fail it could mean they remain where they are or even slightly worse off.

It is no surprise that in their initial session my clients will say they don’t take many risks. Although our brains have evolved to be more motivated to avoid pain than to pursue pleasure (at a ratio of 3:1), evidence suggests we are becoming more risk averse than ever before (you can read more here & here).

The answer is not, however, to avoid risk but to adopt two rules of thumb:

How To Embrace Risk In Business

1. Take Risks In Relation To The Resources You Currently Have

The famed marketer Jay Abraham always had the same approach when he troubleshooted businesses; firstly maximize what the business was already doing and then use the new revenue for innovation.

An example of this would be to use a small amount of money you already have and focus on a local area than to take a bank loan out and attempt to cover the whole country if you are new to the world of business.

The benefit of this is you can gain information & sales with a relatively small level of investment and at the same time not crippling you financially if it doesn’t work out.

2. Resilience Is Your Life Raft

Survival journalist Laurence Gonzalez investigates examples of extreme survival. He wanted to find out why some people survived traumatic events like getting lost in a desert with no equipment while others perished with what seemed to be all the resources they needed to survive right beside them.

The answer he concluded was the ones who survived never gave up hope that they would be rescued and this unfortunate moment would pass. Gonzalez then went onto report that those who were able to get on with their lives were the ones who could put their attention on the present and the future without continually dwelling on the past.

Conclusion

I call these two rules of thumb the risk-resilience loop. At each stage of a business growth, there is measured risk. Sometimes that risk pays off, sometimes it doesn’t. If it doesn’t, resilience is what keeps you going until you can engage in the next risk.

They feed off each other and grow stronger with each loop that takes place. Without risk, resilience is not necessary, without resilience you are likely to succumb to the fear of uncertainty.

To conclude, whether you want to increase your income, your client base or your brand presence, there are ALWAYS periods where risk is present. It is unavoidable if you are to succeed in any goal.

Everyone enjoys the successes, but not everyone has the resilience to look failure in the face, brush themselves off again & strategize their next move instead of quit.

What’s your next move?



Peak Performance Editor

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