Entrepreneurship is all about risks. If you are not willing to risk, then entrepreneurship is not your cup of tea.
However, that said, this is no reason to be reckless. Indeed, there is something called calculated risk. It is this calculated risk that separates successful entrepreneurs from those who fail.
Calculated risk is defined as the analysis of incomplete information through skill and acting on a risky option to actualize a challenging but realistic goal.
How, then can you take calculated risks as an entrepreneur?
Research and more research
Of course, there is the risk of over-researching and failing to take off, but doing your due diligence before setting out and taking action is necessary. In fact, it is critical.
You do not need to know all about what you want to do, but you need to know enough to calculate whether or not the rewards are worth the risks you want to take.
So this means, analyzing trends in the market you want to invest in, market research, customer research, and so on.
Anticipate failure
Nobody sets out to fail. However, what separates those who succeed and those who don’t is their reaction to failure.
In entrepreneurship, you need to anticipate mistakes that you could make that could result in failure. While you need to think of positive outcomes, also consider the negative ones.
What if this product fails to take off? Have you considered if the project falls behind schedule? What if the business fails to pick within six months?
These questions make you prepare for every possible outcome, thus increasing your ability to respond positively to any resulting failure.
Be ready to pivot
Business goals and plans very rarely go according to plan. This is because, while you can control how you respond to the world, the world cannot be correctly predicted. Markets change overnight, trends come and fade as quickly as a drop of water in the desert. This could mean that your outcome could be better than anticipated or worse than you imagine.
In both scenarios, go back to the drawing board. Ask yourself how you can take full advantage of the market if it is better than you anticipated. What if it is worse than you anticipated, how can you restructure?
If funding gets slashed after you set off, rather than sit and bemoan, head back to the start and think of how you can work with what you have. Then if not, think of how to take a step back and begin again. This is called pivoting and it will help you succeed.
Either way, as an entrepreneur, it is often not always about being a step ahead, but taking a step back if it means being able to take two steps forward later.
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