Risk-taking

Risk-taking is the willingness to take calculated risks rather than play safe. Playing safe keeps everything as it is, but a calculated risk can help a business grow and stand out — though it might also lose money.

Calculated, not careless

A calculated risk is a risk you have thought through first. You weigh up what could go wrong against what you could gain, and go ahead only when the reward is worth the chance of failure. Being reckless is different: it means acting without thinking about the consequences.

For example, a teenager selling handmade phone cases online has £150 saved. Instead of reordering the same designs, they spend £100 on a stall at a gaming event, after checking around 2,000 people are expected. If it works they gain dozens of customers; if not, they lose part of their savings but still have stock to sell online.

Some decisions will not succeed

Successful entrepreneurs accept that some decisions will not succeed. A new product might flop, but they treat that as a normal part of business rather than a reason to give up, so they try again. Risk-taking is not the same as determination: determination is carrying on despite setbacks, while risk-taking is accepting that a decision might not work out.

Why it can bring rewards

Risk-taking involves uncertainty, but a calculated risk can bring rewards such as higher sales, a new market or a stronger reputation. It also lets an enterprise do things differently from its rivals, giving it a competitive advantage — something that makes customers pick it over the competition. In a busy market full of similar businesses, the one prepared to try something new gets noticed.