Different people have different comfort levels with taking risks. Some are willing to jump out of a plane just for the thrill of the adventure, while others can push themselves by reaching out to make a new friend. When it comes to entrepreneurship, your comfort level with risk may not necessarily stop you from becoming an entrepreneur, but it can affect your success once you become one.
Entrepreneurs take risks every day, so those who are naturally more risk averse may struggle to grow if they don’t want to take a risk every now and then. Here, eight members of Council for Young Entrepreneurs offer their advice on how risk-averse entrepreneurs can become more comfortable taking risks and why this is important to their long-term success.
1. Assess risk from both emotional and data-based perspectives
Nothing is black and white once 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 the best of one’s 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, it will be easier for your brain to distinguish the two, make better decisions, and overcome any internal resistance if you have both measured in front of you in a spreadsheet. If you follow this method as a leader, you will also help others overcome their fears without losing sight of the real human elements of decision-making. – Benji Rabhan, Approximately
2. Use ‘fear tests’ and ‘dream tests’
Being a risk averse entrepreneur is a challenge. Being an entrepreneur in itself is a risk. I like the method of ‘fear testing’ and ‘dream testing’. Anxiety testing is when you most vividly write down the worst case scenario and your battle plan for it. Dream testing is when you write about the best possible scenario if you take your chances. Most entrepreneurs have enough optimism to realize that the promise of the dream is stronger 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 plunge. – Tyler Bray, TK Trailer Parts
3. Start taking baby steps
As an entrepreneur, you have to be open to taking calculated risks. If you are not willing to take calculated risks, you will never reach your full potential or achieve your business goals. So one way to become more familiar with risk in general is to take 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 that are outside of your comfort zone norm, the more you learn to test the limits of your work comfort zone. Book a one way trip with no itinerary anywhere and figure it out. Go skydiving or climb a big mountain. Even just go to a movie alone. Personally push yourself to do what you normally fear. When those awkward things become your new normal, it will seep into how you think and act about things. – Jonathan Ronzio, Trainal
5. Set up a system of rewards and consequences
I would suggest that 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 achieved will have some consequences. This system allows entrepreneurs to have a more accurate measure of risk as rewards and consequences provide tangible results to observe the results of decisions made. Entrepreneurs can use this system to learn from their mistakes and make better decisions in the future. Taking risks includes trying new methods, exploring new markets and pushing boundaries to drive innovation. Identifying and acting on opportunities is imperative if a company 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 Dalal, Machnet
6. Search for support networks
Find mentors and networks of other successful entrepreneurs who can offer support, guidance and advice. This is particularly important for women in business and owners from poor and LGBTQIA+ communities who may face additional challenges, such as discrimination and lack of access to capital, which can make it difficult for them to take risks. Building a supportive network of mentors and colleagues can help business owners gain confidence, access valuable resources and funding, and receive crucial advice and support that can help them overcome these challenges and thrive beyond their comfort zone. Risk paralysis prevents us from reaching our highest levels of success, and having the right people around you can make you comfortable with being uncomfortable. – Lauren Marsicano, Marsicano + Leyva PLLC
7. Change your mindset around failure
Don’t take anything too personally. The biggest psychological turn-off for an aspiring entrepreneur who is risk averse is the fear of failure. However, if you shift your mindset and focus on failure being a learning opportunity rather than a personal setback, you won’t fear it as much. Therefore, you are not so afraid of risks. After all, with great risk comes great reward, so get used to it. – Andy Karuza, NachoNacho
8. Understand how taking risks 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, it is crucial to weigh all possible situations and the pros and cons of the risk. This way you can judge whether it is worth taking a chance. Ultimately, being a business leader is about taking risks, as success in running a business is not guaranteed. However, by taking a controlled, calculated approach to risk-taking, you can reduce the downside of risk-taking and become more comfortable. – Jared Weitz, United Capital Source Inc.