I’m often asked, ‘as an entrepreneur, should I be cautious or confident, do I take risks, or should I avoid them?’ Being an entrepreneur is going to require that you travel in directions that others haven’t. There is no guarantee that every investment will pay dividends, and not all of your business ventures are going to be a success.
That’s what being an entrepreneur is all about! You have to be comfortable enough with your business skills to understand when something is a risk, or it’s just risky behaviour.
There are a lot of moving parts in any business or investment venture. Taken as a whole, you’re trying to get from point a to point b, but there are many small steps that you need to take to complete the journey.
Is It Risk or Risky Behavior?
Every business involves a certain amount of risk. You don’t become a finance professional without having taken some risks during your career. It’s how you manage those risks, which define the difference between risks and risky behaviour.
Starting a new business venture or making an investment involves risks. Even the safest investment could end with losing all of your money; however, if you take the time to plan your business or research that investment, you’ll be minimizing the risks, but you can´t fully avoid them.
The longer you spend researching and planning different contingencies, the less risk there will be. Rushing into an investment or business venture as an entrepreneur would be considered risky behaviour. Just because you consider yourself an entrepreneur, it doesn’t mean that you have to take unnecessary risks or practice risky behaviour.
Risk And Risky Behaviour and Conclusion
When we build our investment portfolio or we start a new business venture, there are factors that we are taking a risk on. It’s how reasonable or unreasonable are those risks. Could the risk ultimately end in your financial ruin or destroy your reputation?
Sometimes it’s possible to rebuild a fortune, but once you destroy your reputation through risky behaviour it’s hard to recover. Many people consider that reputation is the new currency. It’s something that you can’t buy, only earn.
Are you practising taking risks, or is it just risky behaviour? Analyze someone of the business decisions which you have made and identify whether you were taking calculated and educated risks based on your planning and information, or was it just risky behaviour on your part?