Akinpelu Babatola Guest Writer
The path of entrepreneurship is saddled with lots of risk. It is even right to call entrepreneurs risk takers; after all, starting a business is a risk in itself. Without adequate risk appetite it is likely a business or startup will remain stuck in the same spot for a very long time.
With this in mind, it should be obvious that increasing your risk appetite is necessary in order to build, launch and grow your business.
Before we talk about increasing your risk appetite let’s first discuss what risk appetite is.
What is risk appetite?
For investors, risk appetite defines the amount of variance in the return on investments they are willing to bear. This means, those with low risk appetites are likely to make less returns on their investments. Just as well, they are also less likely to make huge losses.
For startups and any business the concept is the same.
Risk appetite defines how much risk you are willing to carry in a bid to achieve the goals of your business. The most successful entrepreneurs have very high risk appetites and consequently reap the best benefits. If you want to do the same, then you have to take on more risk.
So how do you increase your risk appetite?
How to increase your risk appetite.
- Determine what your current risk appetite is like.
This is a necessary first step. It helps you establish a starting point and determine how much more risk you need to take on to grow your business. Without carrying out this step, there’s a chance you might take on more than you can currently handle and the results might not be positive. To improve your chances, examine yourself and determine what your current risk appetite is like.
- Properly teach yourself.
Within proper education you are likely to make uninformed decisions and thus take unnecessary risks. To counter this, you must become smarter. Educate yourself about the potential steps you need to take, the likely pitfalls along the way and the benefits you can possibly reap from such actions. It would be a terrible idea to take on a lot of risk and only receive little benefits.
- Define what your goals are.
Setting goals for your business lets you measure the performance and growth of the business. Make sure your goals aren’t abstract. You should not set goals like “I want more money.” Rather your goals should be more like ” I want my revenue to go up by a million within this period of time.” This let’s you realize when the performance has increased and sets a defined measurement for such increase.
- Take steps outside of your comfort zone.
The comfort zone is the enemy of growth. Your business cannot grow as long as you stay within your comfort zone. You must make the conscious effort to do things that are outside your comfort zone.
Be careful not to do too many things at once. Let your risk appetite grow gradually and with time you will find your business growing with you.
Once you have done all these, you’ll naturally find your risk appetite growing. Make sure to keep a log of all your activities and to review which steps rewarded you and those that caused you to make losses.