Lately I have been making some big choices that I have never made before. This is always an uncomfortable thing!
Decisions involving money or long-term investments are always hard. For you that might mean increasing your business’ marketing budget, purchasing property, altering your budgeting or spending, agreeing to take out personal insurance, committing to an ongoing donation to a charity or taking on a new project.
Part of the difficulty in making these kinds of decisions is that they contain an element of risk and uncertainty.
Risk-taking is an integral part of business and life, particularly in small business, but so few people know how to manage it properly. The key is to not eliminate risk, but to reduce risk and plan for the worst-case scenario.
The most intelligent risks are those where the potential downside is limited, but the potential upside is virtually unlimited or a big leap ahead.
Follow these three steps to determine whether or not to take an intelligent risk:
1. Establish what the potential downside is. If you do not have the time to determine what the downside is, pass on the opportunity.
2. Ask yourself and experts what can be done to reduce the risk. Although it may appear so at the time, risks are seldom fixed. If you look at the opportunity creatively and objectively, there are often many ways to decrease the downside and reduce the risks.
3. Develop a contingency plan. Start by asking, “If the worst were to happen, what could I do to recover?” Then develop a step-by-step back-up plan.
Don’t be afraid to go out on a limb. That’s where the fruit is!
Seek advice from an expert if need be, but then don’t put it off. Act.
Act now. Put your ideas into action. Make decisions now that will improve your future and make room for new doors of opportunity to open up.
I’d love to hear from you: what uncomfortable or significant choices have you made that have a positive impact on your future?