"What factors help you decide to take risks with your business?"

November 04 2008 - Syracuse Post Standard

Tracy:
Entrepreneurship is about taking risks. A business can’t sit still and survive when the marketplace is constantly changing. As an entrepreneur you must be willing to take, tolerate and test risks to grow and sustain your company.
At a recent event, I heard an accomplished woman entrepreneur from Ithaca talk about key questions entrepreneurs should ask themselves when preparing to take corporate risks. A few of my favorites were, “What do my instincts say,” “What is my tolerance for this risk” and “What do my closest advisors think?”
I use all three of these questions when making decision for my two companies. After thirteen years as an entrepreneur, my gut instinct has always been correct. I take that instinct and weigh my tolerance for financially backing the risk and the time commitment to make the decision successful. When I’m still undecided about moving forward, I consult my advisory board for their opinion. The combination of all three help me move forward confidently.

Julie:
Someone once told me that entrepreneurs as a group are far more comfortable with risk than the average person, and I tend to agree, although in the beginning you sometimes take crazy risks that you don’t even realize are risky until you look back on them on them later.
That being said, these days when I weigh the potential risks vs. rewards of something, I try to follow the trajectory of potential outcomes. “If I take this risk, what are the possible consequences?” You can’t always predict every possible outcome, but you can probably see most of them. Then I gauge how comfortable I will be if the project doesn’t work out the way I have planned. If the worst happens, will I be facing financial ruin? Or just the loss of a relatively small investment?
Everyone has their own comfort level – some entrepreneurs will “bet the farm” on a risky new venture, others are more calculated.

Theresa:
The biggest determining factor in taking risks for Empire Interpreting has been on the growth end of the business. It is always a risk to add personnel, open a new office or add on additional services for your customers. Some of the questions we look at are: - How will this risk grow the business? - Is there a market for this risk? - How will this risk affect the business financially? - Can we afford this risk if it fails? - Will this risk improve our service(s) to our customers?
A well thought out risk can pay off in unexpected ways. For example, when we took the risk to add document translation to our services it quickly expanded into translating entire websites. This proved to be timely as our customers were looking for methods to reach global markets.
Remember that the risks you don't take are often more costly than the risks you do take.