There’s no question that dealing with risk is part of the daily grind for most small-business owners. As I rode into work this morning, I was thinking about risk and couldn’t help but wonder if our attitude toward risk — do we try to avoid it at all costs or do we try to minimize the damage of the inevitable — could make a difference in whether or not we’re successful.
My friends point out that the time I spend on my motorcycle is inherently much more dangerous than the time they spend in their cars. I agree. That being said, I am by no means a risk junkie. And, I don’t expect those who don’t enjoy the pastime will ever understand why I enjoy it so much. I do think the attitude my friends and I take to the road when we ride could be meaningful to a small-business owner and how he or she thinks about risk.
We all acknowledge that there is risk associated with riding
There are many risks associated with motorcycles, some we can influence and some we cannot. We can make sure our machines are running properly, that we have the proper safety equipment, and that we drive safely — we have no control over what everyone else on the road is doing. The same is true for small business. Anyone who was in business in 2008 knows first-hand how the actions of others have impacted his or her business. I suppose there are those who would claim that we could have foreseen the pending financial meltdown, but I don’t believe there was anything the average small-business owner could have done to prevent it.
Avoidance isn’t a workable strategy
The best way for me to avoid the risks associated with riding would be to park the bike and not ride. This is probably not going to happen. Although there are some risks a small-business owner can avoid all together, risk is a part of the game that can’t be avoided entirely. What’s more, some strategic risk-taking is how product breakthroughs are made and new markets are captured. Slow and steady may win the race, but when the race is against a jackrabbit, slow and steady is even a risky strategy. Understand the risks associated with your business and embrace them as part of the package.
Mitigating (or managing) risk is the only workable strategy
I have a friend who insists on riding “naked,” what we call riding without a helmet. Most of us made the decision a long time ago that we were always going to wear a helmet. I’ve never ridden “naked.” We’re also committed to other safety gear like boots, gloves and a good jacket. We make it a point to regularly check the condition of the bike, monitor tire wear, check the oil, make sure the turn signals and break lights are working properly, etc. Some of these mitigation strategies are to minimize the risks we can control — others are designed to minimize the risks that are out of our control.
For instance, I wear a helmet because I don’t want to be seriously injured if one of the other drivers on the road is on their cellphone, combing their hair, putting on makeup, or otherwise distracted (but that’s the topic of another conversation) and runs into me. Small-business owners, who are dedicated to managing risk, prepare for it. Their projections for the future include “what-if” scenarios so they know what they will do in a given situation. Although they plan and work to make sure every new initiative is successful, they never “roll the dice” or gamble on a “Hail Mary” move to grow their business. They acknowledge the risks and make plans to accommodate it — they never ride “naked” either.
Most of the time the risks we face in small business don’t jeopardize life or limb, but they impact the financial well-being of our businesses, our employees and our families. I’m convinced the attitude we take regarding risk impacts whether or not businesses thrive, survive, or struggle. How do you deal with the risks associated with your small business?
As a main street business evangelist and marketing veteran with more than 25 years in the trenches, Ty Kiisel writes about leading people and small-business issues for lendio.com.