Different people have different comfort levels with risk-taking. Some are willing to jump out of an airplane just for the thrill of the adventure, while others may push themselves by reaching out to make a new friend. When it comes to entrepreneurship, your comfort level with risk may not necessarily prevent you from aspiring to be a business owner, but it can affect your success once you become one.
Business owners take risks every day, so those who may be more risk averse by nature may struggle to grow if they aren’t willing to take a chance every once in a while. Here, eight members of Young Entrepreneur Council offer their guidance on how risk-averse entrepreneurs can get more comfortable taking risks and why doing so is important to their long-term success.
1. Assess Risk From Both Emotional And Data-Based Perspectives
Nothing is black and white once it’s measured. Risk can be assessed from two primary perspectives: emotional or data-based. Emotional risk assessment involves considering subjective feelings or perceptions of risk and quantifying them to your best ability. Data-based risk assessment, on the other hand, involves using data and statistical analysis to quantitatively evaluate the likelihood and potential impact of an action or inaction. While the latter is more objective, having both measured in a spreadsheet in front of you will make it easier for your brain to differentiate the two, make better decisions and overcome any internal resistance. As a leader, you following this method will also help others overcome their fears without discounting the real human elements of decision-making. – Benji Rabhan, Aboutly
2. Leverage ‘Fear Testing’ And ‘Dream Testing’
Being a risk-averse entrepreneur is challenging. Being an entrepreneur in and of itself is a risk. I like the method of “fear testing” and “dream testing.” Fear testing is when you write down in the most vivid way you can the worst-case scenario and your battle plan for it. Dream testing is when you write about the best-possible-case scenario if you take your risk. Most entrepreneurs have enough optimism to realize that the promise of the dream is more powerful than the risk of the fear. You are smart enough to right the ship if it capsizes. You are capable enough to handle a worst-case scenario. Bet on yourself and take the leap. – Tyler Bray, TK Trailer Parts
3. Start By Taking Baby Steps
As an entrepreneur, you have to be open to taking calculated risks. If you are not willing to take calculated risks, then you will never reach your full potential or reach your business goals. So, one way to get more comfortable with risk overall is by taking baby steps. It’s best to start with small risks and work your way up from there. – Kristin Kimberly Marquet, Marquet Media, LLC
4. Push Yourself Personally Before Professionally
Learn to take risks personally first, then professionally. The more comfortable you become doing things outside the norm of your life comfort zone, the more you’ll learn to test the boundaries of your work comfort zone. Book a one-way ticket somewhere with no itinerary and figure it out. Go skydiving or climb a big mountain. Even just go to a movie alone. Push yourself personally to do what you would normally be afraid to do. When those uncomfortable things become your new normal, that will trickle into how you think about and operate in business. – Jonathan Ronzio, Trainual
5. Set Up A System Of Rewards And Consequences
I would suggest risk-averse entrepreneurs set up a system of rewards and consequences. This means setting measurable goals that, if achieved, will be rewarded, and if not, will incur some consequence. This system allows entrepreneurs to have a more precise measure of risk, as rewards and consequences provide tangible outcomes to observe the results of any decisions made. Entrepreneurs can use this system to learn from their mistakes and make better decisions in the future. Taking risks involves trying new methods, exploring new markets and pushing boundaries to drive innovation. Identifying and acting on opportunities is necessary if a business is to succeed in today’s competitive business environment. Taking risks is also a way to stay ahead of competitors and remain flexible and adaptive. – Jay Dahal, Machnet
6. Seek Out Networks Of Support
Seek out mentors and networks of other successful business owners who can provide support, guidance and advice. This is especially important for women in business and owners from under-resourced and LGBTQIA+ communities who may face additional challenges, such as discrimination and lack of access to capital, that can make it difficult for them to take risks. By building a supportive network of mentors and peers, business owners can become more confident, gain access to valuable resources and funding and obtain crucial advice and support that can help them navigate these challenges and flourish outside their comfort zone. Risk paralysis prevents us from attaining our highest levels of success, and with the right people around you, you can become comfortable with being uncomfortable. – Lauren Marsicano, Marsicano + Leyva PLLC
7. Shift Your Mindset Around Failure
Don’t take anything too personally. The biggest psychological turnoff for a would-be entrepreneur who’s risk averse is the fear of failure. However, if you shift your mindset to focus on failure being a learning opportunity rather than a personal setback, you won’t fear it as much. Because of that, you won’t fear risk so much. With great risk comes great reward after all, so get used to it. – Andy Karuza, NachoNacho
8. Understand How Risk Taking Differs From Making Bad Choices
Taking risks and making bad choices are not synonymous. If you’re risk-averse, the good news is that you can take calculated risks without feeling haphazard or close to failure. To become more comfortable taking risks, weighing out all possible situations and the pros and cons of the risk is crucial. By doing so, you can assess whether taking a chance is worth it. Ultimately, being a business leader is about taking risks, as there is no guaranteed success when leading a business. However, by approaching risk-taking in a controlled, calculated manner, you can mitigate the downside of taking risks and become more comfortable. – Jared Weitz, United Capital Source Inc.