For most people, entrepreneurship is a game where risk has the main role. Others believe that it isn’t worth it, due to the fact risk is too high. In reality, both types of people are right. Entrepreneurship is powerful and risky at the same time, and it isn’t possible to eliminate the risk. Nevertheless, it definitely has a huge potential.
The most common risks are visible in business ventures which have failed. Usually, it is poor planning, lack of expertise and bad research. In other words, most startups fail because they don’t spend enough time on researching the market and the rivals. At the end, they simply have a product which isn’t needed or it is placed on the part of the market with many competitors.
We will add that poor financial support and lack of structure are common reasons why new business fail.
Calculated risk: A completely different matter
When it comes to calculated risk, you should think of it as a game changer. It isn’t a collection of all problems that may occur, it is simply an analysis of the potential risks which are common and solutions. If the calculated risk is too high, even higher than the benefits of the business venture, you should end it before the start! If you don’t, you will end up with a business which will fail, unless a miracle happens.
Calculated risk also allows us to perform a much better research and investigate our competitors better and more efficiently. One of the main elements is the ration between needed funding and potential profit. If a profit is lower than the funding, there is no need to even begin with the next step!
Using calculated risk for your startup
If we take a look at failed and successful business, we can see a clear difference, besides the obvious one. Failed ones have a poor strategy and even poorer goals. Successful ones have a clear strategy and ideal planning.
With adequate research and with a clear goal, which cannot be changed during the process, by the way, you have high chances to succeed. Calculated risks teach us to be prepared for all potential issues which may occur and to prevent them from happening.
Even when they do occur, calculated risk teaches us that each solution has pros and cons. It is up to you, to the entrepreneur to choose which path is the best. One issue may have more than one solution, so make sure you pay attention to the details. Also, the quickest isn’t always the best.
With calculated risk, you will increase the odds of becoming a successful entrepreneur. It isn’t as complicated as it looks, it is just time-consuming. After all, each research is, but if we know how beneficial this is, we can deduce that spending time on a research is actually an investment rather than anything else. The bottom line is that the calculated risk makes entrepreneurship safer and more rewarding.