Whether you are launching your startup or expanding your services, every venture and business decision brings some risk of failure to it. While there will always be a level of uncertainty attached to any moves or decisions you make on behalf of your business, the overall key for long-term success begins with you analyzing and understanding the entirety of a situation. This type of holistic thinking and calculated strategy will allow you to minimize negatives and maximize positive outcomes for the betterment of your business.
So what is this type of thinking? How can you leverage this type of mentality for the betterment and success of your company?
When we talk about analyzing a situation, we are essentially talking about calculating the overall risk. Calculated risk, by definition, is the projected probability of success that a decision or a project will face at any given instance. While every decision, even the most minuscule ones, play a viable role in the overall shape of a company, overarching big decisions are the ones that can either be the game changer or setback for the growth of your company. For many entrepreneurs, they tend to shy away from these risks because of the strong probability of failure and inconceivable consequences that could potentially follow it in the future. While it is important to be cautious, you also do not want to be too cautious to prevent you from growing your business to it’s much needed potential.
Rather than blatantly take risk or veer away from risk altogether, be strategic. Below, I have provided four beneficial tips to help you with those overarching decisions and increase your potential for high returns. Like it or not, as an entrepreneur, you will be faced to big decisions each and everyday. The only game changer is how you approach it.
1. Do Your Research
The first step in making any type of decision is making sure you do an adequate amount of research on the topic. Like any strategic sound decision, you want to make sure you understand every little detail and nuance before making any overarching commitments for your company. By understand the importance for research, you will be able to grasp holistically the ins-and-outs of whether or not the decision, or risk for that matter, is right for your business. The one mistake you do not want to make is making a decision based on your emotions. Think of a particular financial investor who is asking for 25% of your company. While the financial investment can be incredibly beneficial in moving your company forward, that 25% of equity of your company can put your business in more of a risk than what you asked for.
2. Anticipate Mistakes when Possible
While this may be difficult to do, anticipating any pitfalls can help persuade you in making the right decision at the right time. A smart risk taker makes sure to foresee any potential mistakes or flaws before making any type of commitment. While it is always beneficial to consider the positive outcomes, you always want to focus your attention on any foreseeable negatives that you will have to endure in the future. Think about a potential investment such as expanding a new product line or opening a new branch. The best way to frame your way of thinking is by viewing each outcome in a fiscal perspective. Evaluate various avenues and worst-case scenarios. If you find that it still works in your favor, consider moving on with your decision. If you find that it is more than you can bite off, consider alternative solutions to help you get to your goal.
3. Create Tangible Objectives for your Goal
Regardless of what the risk is, a one-shop decision very rarely hits your goal almost immediately. Because of it, you want to pay special attention in implementing various checkpoints for your goals. As you calculate your risk for each marker, be sure to evaluate how close you are towards your goal. Make sure you are tangible and realistic about the overall timeline and success rate you will be seeing for each individual marker. This type of backwards planning can help you analyze an entire game plan for whether or not your risk is the right decisions.
4. Learn to Say No
At times, while an opportunity may be everything that you could have asked for but is not viable for you at this time, the best answer you can and should say is ‘no.’ Throughout your life, you have probably been trained to adopt the ‘yes-man’ mentality. While saying ‘yes’ can help pivot your professional career trajectory, as an entrepreneur, saying ‘no’ can help save you from making various negative decisions that, at the end of the day, can hurt your business. By saying yes to too many things, you may find yourself wasting valuable time and resources on things you do not need. Instead, learn to say ‘no.’