While entrepreneurs are inherently risk-seeking, they do not want to take risks that their business will fail. The reality is that most of the time on a startup’s journey, success and failure can be attributed to luck more than anything else. People still usually won’t back an entrepreneur who doesn’t have some sort of track record already under their belt. Luckily for us as budding entrepreneurs, there are plenty of ways to mitigate our risk without losing all hope in ourselves by simply taking calculated steps along the way
Entrepreneurs are risk averse meaning they have to be cautious and aware of the risks that come with their business. Entrepreneurs often take steps that will minimize the risk such as not hiring until they know what they are doing, or using a proven method for generating income.
Do you realize that many successful businesses avoid taking risks? That caught my attention in John Jantsch’s Duct Tape Marketing blog post “7 Uncommon Traits of Successful Entrepreneurs.” However, when I consider the 20-plus years my wife and I spent building Palo Alto Software, I believe he is correct. As the second point on his outstanding seven-point list, he says:
Risk Averse–This one confuses many, because great entrepreneurs are not built to take risks any more than the rest of us, but they are wired to see possibilities and have the faith that something can be created of it, even if it isn’t what was initially envisioned. They are frequently better at letting go of something that is obviously a lousy idea, so reducing the overall risk.
I wouldn’t have thought of it that way, but John is totally on the money with that one.
I also like this one a lot:
Planners–Risk and planning go hand in hand. Successful entrepreneurs like the process of planning, not always the end result, but this is what makes them wary of taking dumb chances. They frequently place such a high importance on their life goal that they always have a glimpse of a company idea that can help them achieve it.
This is a fantastic list. John pulls it off again again.
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The “opportunistic entrepreneur” is a businessperson who is willing to take risks. They are not afraid of failure and they will try anything that has the potential to be successful.
Frequently Asked Questions
Is entrepreneurs are risk-averse?
A: No, many entrepreneurs are risk-takers or highly risk averse. Many people view an entrepreneur as someone who is willing to take risks for the sake of innovation and new ideas.
Which is an example of an entrepreneur taking a risk?
A: An entrepreneur taking a risk is someone who goes out on their own in order to create and sell their product or service. This could include starting your own company, signing up for a job overseas that you dont have any prior experience with, etc.
What is risk-averse?
A: Risk-averse is a term that has been used to describe someone who avoids taking risks because they are afraid of the possible dangers involved.
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