Over the last few years, I’ve written of my love for rock climbing. There’s something thrilling about pulling your body up the side of a cliff as your toes dig into tiny little divots and your hands seek purchase on the rocky surface. It’s risky. There’s uncertainty and danger, and I’ve been hurt countless times. But there is no substitute for knowing that you dug deep and tried hard when you get to bask in that glorious view at the top.
Starting and growing a business is exactly the same. You take the leap without fully knowing how it’ll pan out. You make decisions with the best information you have, ride the uncertainty that comes in a volatile and uncertain world, and have to dig deep to find the courage, tenacity, and perseverance when you hit the hardest part of the journey. But when you make the impact you want, when you hit your financial targets, and see everything you dreamed about come to life on your terms, that’s the reward. And it’s magnificent.
But that process, in both climbing and business, doesn’t come without risk.
Between the news media, constant reminders on social media, and loads of studies each year, It’s no secret that as an entrepreneur and business owner, risk – the chance that you might fail – is an inherent part of the equation. In fact, the statistics and data are most definitely not on your side with nearly 20% of businesses failing in their first year and roughly 50% by year five (Lending Tree).
And yet, the number of people starting new businesses is on the rise. Since 2010, there’s been a 74% increase in the number of new business applications submitted, with a nearly 25% increase since 2019 (Oberlo).
That speaks to the powerful desire that many of us have to live life on our own terms. COVID and the Great Resignation are more than proof that people, women especially, are no longer willing to tolerate the intense grind we’re accustomed to.
In fact, I work with a lot of corporate and professional women who are desperate to walk away from cubicle life and the coveted corner office in order to build a business they’re passionate about. But the fear, doubt, and uncertainty often gets in the way
Questions like Can I really do this? and What if I fail? hold them back. And that’s why it’s critical to build a plan. To be strategic and calculated in your risk-taking.
A calculated risk is a carefully considered decision that exposes a person to a degree of personal and financial risk that is counterbalanced by a reasonable possibility of benefit (Masterclass).
When a woman comes to me, desperate to walk away from her corporate job to start a business, I rarely encourage a leap and then look approach. There’s simply no need to pile that kind of stress on your shoulders when time is on your side to strategically plan your exit, get your finances in place, and lay strong business foundations.
Risk-taking, the 5th trait in Entrepreneurial Leap by Gino Wickman, is a mindset. And it can be absolutely terrifying. But if you’re going to run a business, you have to have some risk tolerance. You have to be willing to get uncomfortable, to take the leap into the unknown, fall down, and pick yourself up. In an ever-changing world, you have to learn to adapt and accept that you can’t control everything.
Many people have all the other entrepreneurial traits but are terrified to take a risk and fail. In his book, Wickman points out three decision-making philosophies that true entrepreneurs have, and I’d encourage you to think about where you stand on each.
- It’s more important that you decide than what you decide.
- Just get it 80% right the first time.
- If you have 70% of the information and feel 70% confident, move forward.
If those philosophies don’t jive with you, then you’re likely not a risk-taker.
But there’s hope! If you lack this trait but are super passionate and committed to the idea of entrepreneurship and business ownership, then partnering with someone who is willing to take risks may be a good plan.
For now, I’ll grab my harness and climbing shoes and see you at the top, even though a few scrapes and bruises are likely.
Are you a risk-taker?