Business is built on a series of calculated risks. In order to grow, small businesses must acknowledge and accept a certain amount of risk if their aim is to become an established player in any market. In this post, we’ll draw upon some insight from various industries to provide a guide to incremental, sensible risk-taking in a business context.
Plan, plan, plan (and plan some more)
Instinctive, off-the-cuff business decisions almost always end in failure. Yes, some business leaders extol the virtues of impulsive thinking and swift decision making, but, as a small business with minimal clout in the market, you should avoid this.
Instead, work long and hard on a detailed business plan, wherein you identify where customers or clients will come from and how your product or service will differ from the competition. Having a positively airtight plan before taking the tiniest risk is essential if you’re to succeed in the long term.
Work out what you can risk
One of the first rules you’re told when learning to trade on the forex markets is never to risk what you can’t afford to lose. This maxim also applies to just about any business seeking to push the envelope in terms of strategy. Have a worst case scenario plan in mind if your expansion into new territory goes down like a lead balloon, so you don’t have to cut costs or, even worse, cut down on your staff.
Once you’ve worked out exactly how much risk you’re willing to take on, the next step is very simple.
Go for it
Once you've done your due diligence, you should absolutely take the plunge into your new idea. Whether it’s a new range of products or an ambitious B2B lead generation strategy, you should throw all your enthusiasm into it and believe in the plan you’ve set forward.
Wavering a little or being unsure of yourself in these early days of a business expansion could be massively detrimental. New product launches should be spellbinding affairs that aim to wow your potential customers, and new sales strategies should be drilled into every member of your sales staff to maximise efficiency.
If your risky idea fails, let it fail on its own terms - don’t be hamstrung by an easily remedied problem on your end, as this will prove incredibly frustrating.
Analyse your processes
It’s important to analyse and feedback on any processes that might not be going too well during the initial stages of a new development in your business. Consider subscribing to an agile framework, such as Scrum or Kanban, that necessitates a daily ‘stand-up’ meeting, in which progress is shared and problems are addressed in an environment that encourages collaboration and teamwork.
Doing this every day, and combining it with regular progress retrospectives, is vital if your risky venture is to succeed. By the end of a six-to-eight-month period, you should have a solid managerial and operational system behind you that will put your period of uncertainty firmly in the past.
Keep looking forward
If you’ve successfully taken on an element of risk and expanded your business as a result, the key is not to rest on your laurels and assume everything will be rosy forever. Today’s fast-paced business world means you must always be innovating in order to keep up with the competition.
Think of Blockbuster Video - at the turn of the century, they turned down the opportunity to buy Netflix while at the top of their game as a video rental service, believing the now global behemoth to be a potential loss-maker.
By taking on board these tips, and moving forward in a slow, considered manner with one eye on the future, you may well find that your business outlives your competition and becomes a long-term success - creating happy clients, customers and staff.
John James is the content writer for Learn To Trade, the forex education and learning specialists - offering a range of training courses to help people understand the forex market, as well as its opportunities and risks.