read: how to get comfortable with taking risks
by Ellen Donnelly
“In a world that’s changing so quickly, the biggest risk you can take is not taking any risk.” — Peter Thiel (Source).
'This is one of those motivational quotes that most people can agree with on the surface. Yet I know from experience how much easier risk-taking is to talk about than to put into practice.
New entrepreneurs, in my experience, see risk as something they do once: when they first start their company.
By leaving stable employment behind, they assume an identity of someone who ‘takes risks’. However, as with any new habit, taking risks must become a deliberate, ongoing practice, in order for it to stick.
Why does it matter that it should stick anyway?
In a study of 1,340 entrepreneurs running successful expertise-based businesses, David Baker shared in his book The Business of Expertise, he found that 99% of shared the trait of risk-taking.
The evidence becomes clear: taking risks is your job as an entrepreneur, if you want to be successful.
Whether you run a business or hope to do so one day, building your tolerance for risk is vital.
Read on as in this post we’ll explore what it looks like to truly take risks, how to get comfortable with being uncomfortable, and the inside scoop of some of my own risk taking this year.
Spoiler Alert: I’m going all in on video and educational content including launching a YouTube channel.
This is something I’ve not only feared doing, but feared sharing with you too. I feel nervous, fearful and get that sick-in-the-stomach feeling, which many of my coaching clients also experience and talk through in sessions.
'Risk' looks different for everyone, but if you’re pursuing entrepreneurship you need to make risk your friend if you want to reap the rewards of business building. Rewards that will inevitably come your way if you are willing to make those big moves, and if you have a great product to back it up.
What it looks like when you take risks
At its core, to take risks, just means to make decisions.
Every decision has a potential upside and a potential downside; that’s what a risk is. You risk making the wrong choice with every decision you make (or don’t make).
At Subway, the stakes are low if you make the wrong choice of sandwich. You can have a bite of your friends, buy another, or accept the loss and come back tomorrow.
If you buy a new home and invest the bulk of your life savings to later find asbestos or subsidence, you are pretty screwed.
In business, many decisions can be ‘wrong’, and incur the risk of failure — but that’s the whole point! Most of the time this fear is irrational. As with any game you have to be in it to win it, and the chance of you being 100% wrong and failing outright is generally, pretty low.
Failure is a unique learning opportunity. Soon then, your learning compounds, and creates positive results. Your responsibility as an entrepreneur is to make decisions as quickly as possible so that you can pick up the pieces and learn from those decisions, or reap their reward.
Getting up close and personal with risk
Now we’ve established that risks are decisions, how do you get more comfortable with them?
You get to know them better.
Like a scientist testing a hypothesis in the lab; you start by exploring one route, knowing full well it could be wrong, but you find solace knowing that a negative result is still a result!
Look at your business in the same way, and start understanding risk better, so that you can get more comfortable with whatever outcome occurs.
Let’s look at the three core risks that come up most often in my coaching practice, and how you can get comfortable enough to move towards your goals despite them.
Financial risks
Losing money is generally considered a risk — but is this loss of money going to put you out of business, or just set you back a little and can later be recouped?
The financial risks should be taken objectively, looking at the cold hard numbers — how much you feel you can afford to lose might be different than the reality of what you can afford. Know your numbers, financial runway, and how profit and loss (and tax!) really work so that you can make informed financial decisions. Also, consider what is a cost vs what is an investment; the latter meaning is has the potential to bring financial gain as a result. E.g A productvity app is only an investment if the money you are spending on it, is being recouped through genuine productivity boosts. Working with a coach or a mentor is an investment, if they make your business better, a cost if you stay exactly the same.
You can get comfortable with financial risk by starting small, putting measures and goals around the risk, and also, playing the long game. Rarely should you expect to see a return on investment straight away, but know that the gains can compound if you stay the course.
Reputational risks.
You can risk undermining or ruining your reputation by saying or doing the wrong thing, or by virtue of association to people who do something shady.
As entrepreneurs, we are always pushing our comfort zone and trying new things as part and parcel of doing innovative things, and our reputation is at stake during the process.
We live in the Google age where everyones reputation precedes them online and cancel culture and a 1* review can undermine years of hard work overnight. It’s a scary fact and one many entrepreneurs avoid thinking about, myself included.
The good news with this risk, is that by being a good person, upholding your values, and being authentic, your reputational risk is generally low in most choices.
By working on your blind spots, seeking feedback, and being selective about projects you take on you can mitigate the risk of things going wrong. It becomes trickier when you align with people or projects that you are unfamiliar with, so do your background research and know your personal SWOT (Strengths, Weaknesses, Opportunities and Threats) so that you can prepare for the potential pitfalls ahead of time.
I’ve also written before about the risks associated with having a personal brand and being in the spotlight, and how you need to manage this alongside the actual running of your business too, as you may be able to fly more under the radar than you think.
Time risks.
Time-based risks are rarely considered as damaging as financial ones. But the truth is that whilst you can always make more money, you can’t buy more time.
Spending time on anything is a decision not to spend it on something else. Indecision is itself, a prime example of a time based risk because whilst you might not be putting your money or your reputation on the line, you are putting your time on the line which arguably, is even more valuable given its finite nature.
I’d love to compare younger and older entrepreneurs’ attitudes towards time based risks to see which demographic takes more, or if it looks similar across the board. If you know any — send my way!
Working with new and young businesses owners has given me a unique insight into how they perceive time-based risks.
They have a lot of life ahead of them and might not feel the same kind of time pressure for success (as clients in their 40s-60s tend to feel more acutely).
But also, they are in a position where their new business itself doesn’t take up lots of time yet so there are long stretches of time in the week or month to get stuff done. A lot of time to figure out exactly what they should use that time for, when there are no existing demands from customers or partners to deal with yet… just an empty calendar in which to create tasks they hope will bring customers.
Time is easily wasted on making things perfect, or procrastinating with busy work that doesn’t truly move the needle. Like spending hours crafting a Twitter thread three people see. Or reading loads of business books and not putting anything into practice. When you have a lot of time and not a lot of responsibilities, it’s easy to see time as expendable, but its a risk of its own kind.
This is the most crucial crossroads for the entrepreneur; and often when they are the most afraid of the financial investment of coaching since they have not yet got paying customers the financial risk feels high, but they also risk spending 3, 6 or 12 months of their time, going by without the results they wanted.
It’s a choice of investing more money (in support), or more time (figuring it out alone), to reach their goals.
You can always get more money, but you can never get that time back.
With all risks, you must learn to be discerning and to trust yourself, because these decisions will keep coming thick and fast if you choose the life of an entrepreneur. And most of the time, you can course correct (even if it feels like all hell has broken loose).
My own recent risk-taking
In 2022, in its second year of operation, The Ask coaching business grew a little from the year before, but not exponentially.
I spent most of the year on the road living in different countries and so my bank balance was not looking as healthy as it had been the year prior.
Added to this, a world-wide recession.
With coaching for most people being a luxury expense, and I was feeling a little uneasy. There were moments where I considered securing some part time work as an insurance policy.
However, as January of 2023 arrived, my thoughts and plans were directed towards going on the offence, and not the defence. Meaning, rather than strip back and play safe and small, I would instead take risks and go big.
This has looked like:
Bringing on a permanent team member
Launching a YouTube channel and hiring an editor to produce 4 videos per week
Committing to a desk space for 6 months (paying up front)
Bringing on two (yes you read that right) different consultants to support the newsletter and an SEO consultant
Each one could be both a time and financial gamble.
So is this risky, or is this just doing business?
To an accountant, I might not have been able to ‘afford’ these choices on paper at the time of making them. But to me, with the knowledge I have of my business and the industry I specialise in, I felt I couldn’t afford not to make them.
Since I’ve already invested so much into this business, such investments no longer feel significant but more like adding logs to an already burning fire — expecting some sparks to fly. As a company director, you learn that taking profit and reinvesting it the thing to do, not take home a large salary and sit tight.
The combination of many risks
Well at the risk (ha) of sounding like an excerpt from my diary, I’ve felt the risk of committing to a YouTube channel weigh heavy on me. That’s because launching on YouTube is not something you do everyday, at least not if you are taking it seriously.
It’s been six months in the making, in fact.
Learning about the platform, figuring out what kind of content to create, sorting out the tech and equipment and then physically doing the work involved in filming is a whole new set of skills. The learning curve has been steep, and watching myself back cringeworthy. I’m not sure how well I come across, on camera in an empty room reading from a script.
It’s felt like a reputational risk.
I’m shifting gears now. After writing online and getting good at the newsletter thing, I’m at the ‘low competence’ zone when it comes to YouTube and not yet as proud of my creations as I’d like to be, to share them with the world. But risks happen no matter how astute you think you are. Because success and growth demand more of you as an entrepreneur to be successful.
I know these videos are ‘good enough’ and that ‘perfect’ is not the goal — shipping is. Starting is a prerequisite of learning and growing; knowing that I’ll evolve in the process. Video is such a huge part of online marketing these days, that not doing it, has felt like an even bigger risk.
So with that out the way, I’m on YouTube! If you check it out, please hit like and subscribe as I’m building this from zero and your support means the world.
And for yourself, and your upcoming risks, keep this 3-step plan in mind
Identify what risk you’re taking (what is this decision about, ultimately?)
Understand the risk and the up and downsides
Take the risk (it’s your job!) — and learn from the results for next time
Thanks so much for reading, and I hope this has encouraged you to pursue risk and get comfortable making decisions so that you can keep moving forward in your entrepreneurial career.’
If you’re ready to explore your route to coaching and find your perfect match, book your complimentary coach matching call with our founder Catherine today.