If you are the type of business leader who is prepared to take risks, then you may often reap the rewards of your confidence. But how can you minimise the impact of negative consequences should those risks not pay off?
As a small business owner, it is important to understand potential consequences and rewards for the decisions you make, and you should try and find a balance between business risk and reward. Some business leaders can be over-diligent and unable to take a leap of faith, while other entrepreneurs chase opportunities without considering the pitfalls.
If your primary aim as a small business is growth, it’s good to take a chance, but keep a careful eye on the areas and aspects of your business that could be badly impacted because of a poor decision.
Assistant Head of Risk Underwriting, Paul Anderson, believes that failing to plan for a ‘shock’ is often the result of a business having seen success from risk-taking in the past. “It’s a mistake to assume ongoing success,” he explains. “Just because you have done okay in the past doesn’t guarantee it will continue to be so in future. For example, the bigger you get, the more you will appear on competitors’ radar, which is a risk in itself.”