• 5 Key Ways Business Owners Turn Risk Into A Safe Bet

    Risk_RewardWayne Gretzky, the famous Hockey League center once said,” You miss 100% of the shots you don’t take.” I know a lot of business owners who think about taking a risk, and that’s as far as it goes: a thought. A thought, however, can lead to a step. A step to a leap. Some leap in faith, some leap with certain safety nets in place. Constructive risk-taking involves innovation, experimentation, flexibility, motivation, planning, and putting effective systems in place right up front. But it doesn’t always work that way.

    Don’t get me wrong. Risk-taking is not for everyone, but it is for every business owner who plans to be around a while. Still, there are risks and there are risks. A business owner, by definition, is an entrepreneur, and an entrepreneur, by definition, is a risk taker. The type of risk taking I’m talking about here is taking an idea (a dream) and putting it into practice (reality), resulting in a commercially profitable business.

    Business owners must ask themselves, “Is the risk worth it?” To determine this, one must determine what that risk might involve. Some potential factors include:

    • Stress/worry

    • Financial strain

    • Challenges posed by family and friends

    • Possible failure

    Ironically, being too positive about one’s venture can be a downfall as well. After all, a skunk sprayed with perfume is still a skunk.

    Steps that are imperative to reducing risks include:

    1. Pre-thinking what could go wrong and brainstorming possible solutions

    2. Having a “Plan B” and even a “Plan C” as a backup plan

    3. That you quit thinking that asking for help is a weakness. Business Coaches may seem like a strange concept to some, but even athletic teams have coaches. Why wouldn’t you?

    4. Recognizing that our instincts don’t lie. Women in particular have an uncanny ability to be intuitive about people, trends, and have a finger on the pulse of what works and what doesn’t, but men are intuitive, too, and too often we sell our intuitiveness short. If your gut is telling you something isn’t right, chances are, you should listen.

    5. Offer customers a “safety net” in the form of a money-back guarantee.

    Reducing risk in many cases means revising your marketing focus. Richard Shanks of upshiftcreative.com took radical departure from the company’s standard marketing venue. “About 10 years ago when my firm www.upshiftcreative.com began handling the branding and advertising for Weber Grills, we took a radical departure in their marketing…We removed the typical huge picture of a grill and instead focused on the reward and sensations of grilling. Everyone wants to be the “backyard hero”; everyone has warm memories of great conversation, deep friendships and wonderful grilled tastes. It’s more than the metal; it’s the memories…”

    Look at the focus of your marketing. Is it directed at you, or at your customers’ needs? A little revising might be in order.

    A key question business owners ask themselves is with regards to taking risks is, “Can I afford to do this”, when the real question is, “Can I afford NOT to do this”. Human nature is unique in that we can afford what we prioritize as what’s most important to us.

    When not to take a risk:

    • When you’re under intense pressure, such as critical financial or emotional pressure

    • When you don’t truly believe in what you are producing and selling (just because something is a good idea doesn’t make you the expert)

    • When you have a history of jumping from one thing to another and not committing to anything or anyone

    And remember, it’s not just about you. What about your customers? Should they take a risk on you?

    Most business owners would say, “Yes!” but companies who offer risk-free guarantees in the form of money-back guarantees find that removing customer risk often also removes the company’s risk as well, so long as the product or service satisfies the customer. The phrase “money-back guarantee” is a safety net for the customer, though ironically many don’t act on it if they truly are dissatisfied.

    There are some surprising reasons for this:

    • People don’t like admitting they made a mistake, so they’ll “talk themselves into” thinking their choice was wise

    • People have trouble returning “gifts”, so if you make the product or service out to be a gift to them (for any number of reasons) they will have a hard time returning it.

    • In retrospect, people will not remember a purchase as a poor decision, but will find ways to justify it.

    • People have trouble resisting the word Free, Risk-free or even the phrase “greatly reduced”.

    Still, you don’t want your customer’s risk to be greater than your own. Risk often involves change. Change involves effort, and psychological studies out there show that people are reluctant to change, so adding value to your product or service is an absolute must. Remember the Godfather? While I don’t recommend “Godfather Marketing” tactics, I do support that you, “Give them an offer they can’t refuse.”

    Certainly with regards to taking risk there are many factors to consider, but I must go back to Wayne’s quote at the opening of this article. 100% of your “shots” at making it will be missed if you don’t at least try. You wouldn’t jump out of an airplane without a parachute. You wouldn’t cannonball into a swimming pool that’s empty of water, and you wouldn’t walk naked into a boardroom. All those would be risky, but the risks you want to take with your business need to be carefully considered and thought through.

    So, what about you? What risks have you taken? How have those risks worked for (or against) you.

    Clip to Evernote
    Post Tagged with
Animated Social Media Icons Powered by Acurax Wordpress Development Company
%d bloggers like this: