How Do You Handle RISK in business?

At the end of this article I’m going to link you to a site where you’ll learn how to completely eliminate risk.

But before I do….

Have you ever thought about the distinction between….

Uncertainty VS. Risk

I didn’t used to….and it cost me BIG.

Both can cause big trouble in the search for your perfect business.

Both can wreak havoc on the process of creating your business.

Cross them up and you’ve got trouble.

It’s vitally important for you to recognize them each for what it is.

The number one thing to realize is that ‘Risk’ is not what stops you.

‘Uncertainty’ is…

Here is a funny story about something that really happened to illustrate:

I used to race offshore power boats.

These are sometimes called ‘cigarette boats’.

While it was a hobby for me, I was racing in the ranks with American Power Boat Association professionals.

There is no other way to put it, this kind of racing is dangerous…REALLY dangerous…

Fifty or more boats, thirty to forty feet in length, each driven by thousands of horsepower, fueled by highly explosive super-high octane gasoline, racing in rough seas at speeds of 100 mph and more, often within yards of each other….

A real formula for disaster…

It is real risky business…

If you make a mistake.

In a split second, people routinely get seriously hurt and occassionaly die while participating in this sport.

And yet, lots of people choose to adorn themselves in fireproof suits, bullet proof vests and fully enclosed high-impact headgear and helmets to take that risk each and every day…

They take these precautions to mitigate the great risk associated with racing in these conditions.

Here is the thing for you to recognize…

They know what the risks are and they have measured them against the potential for reward….in this case, victory.

Now..

Picture one of these sleek, brightly adorned, amazingly powerful boats parked quietly at rest along side of a dock.

Because it’s exciting to just be near one of these miracles of technology, raw power, and beauty, spectators crowd themselves dangerously onto the adjacent docks and moorings just to get a look at these nautical wonders.

So there you have it…the scene is set.

Nautical wonder parked along-side a doc…thousands of spectators gawking in focused awe…

Along comes the boats driver, my good friend, world champion racer and APBA Hall of Famer, Art.

The veteran racer, un-phased by the din of the crowd of onlookers, nonchalantly hoists the bowline to bring the boat close enough to step on-board.

As he steps one foot onto the brightly painted bow…there was a loud gasp from the crowd…

Uncertain of the reason, Art stops…

One foot on the boat….

One foot on the dock….

With the boat beginning to drift away from its moored position.

Can you imagine the look on Art’s face when he realized that he was destined, without any available alternative, to fall between the two into the filthy, oily, flotsam-covered water?

I was there, face to face, less than 5 feet away…

The look on his face was priceless.

And fall he did…

“SPLASH”

His fall was followed by a blue-streaked cloud of cursing from Art….

And then lots and lots of laughter all around…..even from Art.

Thankfully nothing more than his pride and racing suit was hurt….but he could have been hurt…

He could have hit his head and drowned.

I don’t know if you can envision this but it was a bit humorous at the time.

As silly as the story is, it is illustrative of this distinction between uncertainty and risk…

Art has been stepping aboard to race these prop driven projectiles for over 20 years.

He has calculated and recalculated the risks and has chosen to employ every available precaution to mitigate them while racing.

Ironically it was not the circumstance of risk that got him that day….

It was the hesitation of uncertainty that did.

Risk is about dealing with what is and is not known to you.

While entrepreneurs are often designated as ‘risk’ takers, the truth is that while the most successful entrepreneurs may decide to take a risk, it is always a highly calculated one.

In other words, the entrepreneur has done the often exhaustive research necessary and makes a risk vs. reward payoff decision.

When Art climbs aboard his boat adorned in protective garb and equipped with safety systems, he is taking on risk.

But it is risk he knows all about.

Uncertainty on the other hand will often cause the even most successful entrepreneur to freeze in his tracks.

Lacking the information necessary to transform uncertainty to a qualified and quantified risk the entrepreneur can’t move forward and can’t retreat.

As in my story, this kind of indecision and stagnation in a business, will have devastating consequences…

Even for the veteran entrepreneur.

The key is to eliminate as much uncertainty as possible by doing whatever research is required…to transform uncertainty to qualified risk…and make an informed risk vs. reward payoff decision.

Novice business owners make mistakes in this area frequently.

Encountering a situation of uncertainty it can be tempting, even romantic, to choose to accept the “uncertain” at face value as a “risk”….and without qualifying it further…without reducing uncertainty and understanding what’s at stake…gamble.

Unfortunately the majority who do this lose….and, just like Art, end up in a quagmire of trouble.

Despite the romantic portrayal of ‘gun slinging risk taker’ the most successful entrepreneurs are highly risk averse..

Consider your business or business concept:

What are you uncertain of?

For instance:

Do you know with certainty that there is a problem or dissatisfaction people are willing to spend money to address?

And

Do you know with certainty who those people are and how they will make the decision to purchase a product?

The answer to these two questions alone will provide a degree of certainty of about your opportunity.

Even if you cannot characterize it precisely…this process of distinguishing uncertainty from risk will reveal insights that just may make the difference between success and failure.

For each decision you make in the creation of your business, ask yourself:

What do you know with certainty?

What are you uncertain of?

What information could you get to reduce that uncertainty and allow you to proceed with a qualified risk vs. reward decision?

Gather the information, calculate the risk and keep it moving.

This is exactly the kind of thing a business coach can help you with.

It can be very challenging to ‘see’ these distinctions on your own.

Those closest to you are locked into you vision and won’t see them either.

A professional coach on the other hand has a finely trained eye for these things and will help you make the most of every opportunity.

The expert coaches in ThePerfectBizBuilder Coaching Program are the best in the business.

I tell you all about it here:

ThePerfectBizBuilder Coaching Program

If you are serious about building the business of your dreams, then you need what my coaches have got to give.

Check it out right now and let me know what you think.

I’m standing for all that’s possible for you in life and business.

Sincerely,

Steve

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