Entrepreneurs can start or grow a business like no risks are involved. Risk happens when status quo is challenged. An entrepreneur who wants to grow his business must go through the same uncertainty he went through when he or she aspired to have a business. These successful entrepreneurs are not without fear of risks. They venture the unknown with the possibility of both success or failure. It is their ability to mitigate risks that increase their odds of winning, making it less of a gamble.
Not all risks are made the same and not all people have the same risk profile. The more you understand the different types of risks and your risk profile, the more ways you can predict and control the outcome, as well as adjust yourself, making you more confident to take risks.
Knowing your risk profile will allow you to see which one to work on. The idea is to take small risk and make small wins or loses allowing you to learn from the experience. The more experience you have the more confident you will become. You also need to be self-aware on how much risk you can take in order to make the exercise effective. In terms of financial risk, for example, you need to know up to how much you can lose in a venture. This will help you know which business you can comfortably start or if the risk involved is high, you can invite others to share the risk with you.
The 5 types of risks are the following:
|Finance||Loss of money||
|Lifestyle||Change in status quo as you go through entrepreneurial process||
|Mental||Uncertainty which will cause anxiety||
i.e. sleepless nights due to lack of funds for salary and rent
|Emotional||Getting humiliated as a result of failure||
|Social||Relationship problems. Less time with family and friends or relationship concerns with people you lead or investors||