Business and risk are two words that don’t sit together comfortably for many professionals.
However, it is often said that entrepreneurs must take a business risk to build a successful brand.
But is that true?
Business Risk and the Entrepreneur
Many perceive entrepreneurs as instinctive risk-takers. It is believed they must take a serious risk in order to chase their dreams, rolling the dice on a 50/50 success or failure outcome.
They have a romantic image as the gamblers of the corporate world.
It is true that many successful entrepreneurs have burned bridges before embarking on an all-or-nothing start-up. They have shown absolute commitment and, by removing the safety net, have given themselves no option but to succeed.
Not that they always do.
I have admiration for those whose self-belief and dedication to their aims are so strong that they risk it all to follow their ambitions.
However, is taking a business risk critical to being a successful entrepreneur?
Is Business Risk Essential?
Budding entrepreneurs might be expected to quit the safety of secure employment so that they have the time and energy to focus on creating a new business.
However, some of the most successful brand builders actually kept their jobs until the start-up was ready to fly.
On this list, you’ll find Apple pioneer Steve Wozniak, Nike’s Phil Knight, eBay entrepreneur Pierre Omidyar, and aden + anais founder Reagan Moya-Jones.
There’s an argument that being averse to business risks can be a beneficial characteristic in an entrepreneur. A calm, rational, calculated approach can be a better foundation for long-term growth and success than the ‘gambler’ stereotype.
Change Perceptions
I believe the perception that you must burn all your bridges and risk everything to be a ‘true’ entrepreneur is damaging.
Yes, it works for some people – those who will never chase their dreams until the safety net is removed.
But there are others with incredible ideas and work ethics who are discouraged from chasing their dreams because they don’t fit the stereotype of the business risk taker. Portraying risk aversion as a negative in business is damaging; it is putting off some of the best and the brightest.
And what is risk anyway?
You think that launching a start-up is a risk and having a full-time job is safety? Really? Relying 100% on a single employer to keep you afloat isn’t a risk?
How many people lost ‘secure’ jobs in the past two to four years, during COVID and subsequent economic turmoil?
Surely the less risky approach is to have a fall-back plan. Creating a new business is a risk – a reported 60% of UK start-ups fold in the first year – but doing that while maintaining your full-time job removes a huge part of the jeopardy.
You retain your salary and something to fall back on if the start-up fails, but are building an alternative source of income should circumstances change.
Know the Risks
We are all individuals with differing characters, so there isn’t a ‘right’ answer to this question.
If you need the fear factor to motivate you, taking a business risk makes sense. But don’t be discouraged from trying if you don’t fit this mould.
If you need security while you dip your toe in the scary world of start-ups, don’t think that makes you less of an entrepreneur.
In either case, what is critical is being able to assess and respond to risk. Anything we do in business carries a degree of uncertainty. An ingredient in success is being able to anticipate and recognise these, strategies to overcome them, and make the tough decisions needed to succeed.
The ability to identify and mitigate risks can be the skill that defines your success as an entrepreneur, not whether you walk out on your current job.
