Starting a small business is a risk itself, however, it takes even more risk-taking to grow that business.
Facebook creator Mark Zuckerberg hit the nail on the head when he said: “The biggest risk is not taking any risk.”
There are basically two types of risks. One, throw caution to the wind and win big or lose big (that’s how many start-ups begin) or two, instate constant risk, where process and core o erings are iterated without betting the whole company on it.
Businesses that haven’t embraced either form of risk into their operations are likely to have problems. It’s a mindset that needs to be embraced across the business as well, not just from the leader. The world is changing so fast, as are the needs of the business. Just ask Blockbuster why it went bust.
Intelligent risk taking is definitely the way forward. Small businesses can be nimble and think big – and win.
Here are three ways to embed risk-taking into a business to fuel growth:
1. Practise saying yes
The urge to say no to a new idea can creep into small businesses. Privately owned small business carries a lot of risk, both for the actual business as well as their family financial responsibilities. But remember, you don’t always have to bet everything you have on it. It’s actually better to create a culture of friction to saying no. Just take a look at Amazon who created the “the institutional yes”. This means if anyone comes to a
Just take a look at Amazon who created the “the institutional yes”. This means if anyone comes to a manager with a great idea, the default answer has to be yes. And if it is no, the manager is required to write two-pages explaining why it’s a bad idea.
2. Experiment, experiment, experiment
Remember Blockbuster? Netflix, a fledgling company in 2000, proposed a partnership with the film rental giant. Netflix would run Blockbuster’s brand online and Blockbuster would promote Netflix in its stores. However, Netflix was laughed out of the room. But it was Blockbuster that ultimately paid the price, going bankrupt in 2010. Netflix is now a $US28 billion dollar company, about 10 times the worth of Blockbuster.
It’s a perfect lesson for staying open minded to change – after all it’s the only constant in life and business, and keeps things interesting.
Also, take a look at Airbnb and Uber. These companies have experimented with their internal operations and structure – from their business philosophies to how employees interact with one another, how they measure performance and even their attitudes toward risk.
3.Bank on your brand.
Without the large budgets of the bigger businesses it can seem daunting to market your brand. However, as a smaller business it’s actually easier to take some calculated chances – you’re not bogged down by all that red tape. Too many layers of decision makers can make it hard for big business to be flexible and daring with their branding. The sooner you get your idea out into the market, the sooner you get feedback (or better still sales!) and the sooner you can evolve it.
Calculated risk taking in marketing can be priceless for brand exposure. Take supermarket chain Aldi for example. They’re the ‘underdog’, sitting in the shadow of Coles and Woolworths. Yet their advertising is quirky and sometimes unexpected. Their risk is reduced because they’re not the market leaders, but their advertising is definitely attracting the right attention.