7 Ways the Best Entrepreneurs Manage Risk Reward
Entrepreneurship is one of the most exciting, risk-taking, and rewarding ventures you could ever think of if you want an adventure of a lifetime. Beyond sports of breath-taking heights and extremes, pioneering your own company or business requires physical and mental strength, as well as the emotional drive to wager on your guts and wits in taking risks and gaining rewards. If you are interested in building up your own company or are just looking for the courage to do so, these seven ways the best entrepreneurs in the world learned to manage risk reward might help you:
1. Don’t be afraid to take the leap. Bigger risks equal bigger rewards.
The very familiar phrase take a leap of faith has got a lot of things to do with entrepreneurship. If you have the idea on top of your head, and you think it will get you somewhere, then why not develop it? There are not many people in your age who are thinking about something like that. For the average young person, finishing a degree and getting employed in a big company should be the cutting edge of becoming successful. But the question is, is that about right?
So you’ll take the “easier” way of pursuing a career after college instead of following the ideas in your head just because you think the risks are too high. Then imagine yourself now sitting at a table, all stressed and frantic because your deadline is in an hour and you have a strict and demanding boss (which is not particularly happy to see you). Can you work with that? Or do you want to go back to the starting line and decide differently then?
2. Think of working for others as a bigger risk.
If you go back to what you imagined, working for others should be less favorable to you. Yes, it’s true enough that you can get your bills paid by working for others, but your salary won’t be enough for you when time comes. You can’t just rely on superb performances and timely promotions. Starting off on your own might just be the right thing for you.
3. Think of uncertainty and find your way through it.
Change and uncertainty are constant in the world you live in. In business, learning to accept the presence of uncertainty helps an entrepreneur become aware what he/she needs to do and eventually mature in the process. If uncertainties are constant, then finding a balance between the risk-reward relationship should be one effective thing to do to make your way around it.
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4. Starting on your own can be a good training ground for you.
If you ask around the people in the offices of the big companies what they really want to be if they are given the chance to do so, they would likely answer you with something like I want to be the CEO. If you want to achieve the CEO position, and you start off by getting hired by the same company, how many years then would it take you before you can land on that spot (if you can)? And there’s no way a top of the line company would give anyone the CEO spot at an early age. But, of course, that is so possible when you own the company yourself, right?
5. Consider your options and competitions.
The best entrepreneurs in the world consider competitions seriously. But what makes them effective is that they know how to understand the game and make their way through it. Looking out for opportunities where others do not even dare consider is a good risk-reward strategy point.
6. There are no easy roads in entrepreneurship. Sometimes you even hit a dead end.
Betting on your guts and wits does not always give you a positive outcome. Sometimes, there are even more failures to make before you finally arrive at the right result you wanted in the first place. But that is also how the risk-return ratio definition works. There are lots of big business personas today (like Mark Zuckerberg of Facebook, for example) that can attest to the reality of this. When you think of the risk reward trade off, not all of the contingencies that you will work on can be pulled off. Keeping in mind, that taking risks are part of becoming a successful and mature entrepreneur.
7. Investment does not only directly mean money and machinery, but also you (your time and even health).
No one is a superhuman when it comes to entrepreneurship. The time you devote to your business will define the output you will make. When you truly want to succeed in the business industry, there are times that will call for sleepless nights and overtime. This means you also have to take personal risks to achieve the kind of rewards you aim for. If you are prepared for that, then you should be viewing these risks as possible rewards in the near future.
If you think of risks as stepping stones for a higher level of maturity in the business world, understanding them is the best thing you need to do. Patience and procrastination may be two different and contradicting attributes, but they are key components when you are going to take risks. If you have a clear goal in mind, then risks shouldn’t steer you away from achieving them. What you will get as a result should outweigh your hesitations in the risks in front of you. They may not always go the way you expect them to, but in the end, you still have to make a decision. One of the best things you must learn from the best and successful entrepreneurs in the world is that taking the leap and taking the risks, whether to a good outcome or an unfavorable one, is better than not taking one it at all.