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New ideas   Every business has a degree of uncertainty in it

Is it a risky business move of playing with luck?

Business meetingYou may often read that some company was engaged in a risky business move and although we intuitively know what that means, if we try to define a risky move we'll see that's not so easy.

There are two main points when we are talking about a risky business move: how to recognize it and will it succeed.

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Without any doubt, nobody can run a business without taking on any risks. The start of a new venture is a risk by itself, not to mention all decisions made along the way while we are trying to succeed. It may be a new product, new employees, or a new idea to enter a new market.

You most certainly also heard that the greater risk will yield greater rewards. This may be true - if you know how to recognize is it a risk or just playing with luck.

So, how to recognize it?

Every business has a degree of uncertainty in it and you have to learn how to deal with it. You already got it if you are in any kind of business; those who can't stand uncertainty are not people that engage in some business of their own.

First, forget perfection.

You need data to make a decision but forget collecting 100% and forget a perfect decision. You can't have all data you need and even if you could it would take forever. In the meantime, markets and companies are changing, and you can't incorporate all that into your "perfect decision."

Collect just enough data, let's say 80%, and build on top of it.

While doing that remember one thing: being slow is the most expensive decision you can make. Instead of "What if we fail?" think how to make it.

Once you went through it all, when you have an idea and when you know how to make it work, only then ask yourself what if you fail. Maybe you'll need a different approach? More money? When will you quit? But - after you know how to execute.

And third, ask yourself can that single idea take down your whole company.

If it can - how to prevent it? Do you need more resources? More workers? Maybe you need to scale it down a bit?

If your idea will only cost you money and not your company, go for it. As we said, there's no rewards without risk, and there's no place for cowards in business.

So, taking all that into account, what is a risky business move?

Well, if you through all what we wrote before, there are only two possible answers: the new idea is not worth it, or it is good to go.

If you think it through, you will see that even the most complex business ideas may be break down to those simple answers: yes or no. With some thinking, you will see that that new revolutionary product of yours is as risky as hiring a new employee, for example.

And what is playing with luck? Only if you say "OK, let's go" without thinking. Then it's not about a risky business move, it's a move that you should never do.




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