As a business owner, you’re no stranger to the idea of risk. It’s a natural part of running any business. However, sometimes opportunities are passed over because they’re seen as too risky when, in reality, there’s something else at play—hesitation or concern about the unknown. It’s important to recognize when external factors like the economy or industry challenges might be clouding judgment, making us label an opportunity as “too risky” when it could actually benefit the business.
When Caution Masks Opportunity
In today’s economic climate, it’s understandable that business owners feel the need to be cautious. With rising interest rates, inflation, or even reports of other businesses struggling, you might hesitate to take on a new venture. But often, these concerns serve as barriers to seizing valuable opportunities. The key is knowing when caution is warranted and when it’s holding your business back.
For instance, let’s say you’re thinking about investing in new equipment or expanding into a new market. It’s easy to justify inaction by pointing to unpredictable interest rates or recent supply chain issues. But ask yourself: Are these truly obstacles, or are they simply giving you a reason to delay? Sometimes what seems like a high risk move is actually a missed opportunity disguised as “waiting for the right time.”
Avoiding External Excuses
There will always be factors that make decision making feel uncertain. Consider these common scenarios where risks may seem overwhelming but could actually lead to growth if approached with thoughtful analysis:
The Economy : When economic conditions are challenging, many business owners freeze up. However, history shows us that companies often emerge stronger by making bold moves during downturns. For example, during the 2008 recession, businesses like Netflix and Airbnb saw opportunity amidst uncertainty. Instead of slowing down, they adapted and grew significantly while others hesitated.
Interest Rates : High interest rates certainly make borrowing working capital more expensive, but it’s important to weigh the potential return on investment, rather than dwelling on the cost of money. If a new venture could significantly boost revenue, then the cost of borrowing might be justified. Successful businesses focus on the overall opportunity rather than getting hung up on short term costs.
Industry Disruptions : External challenges such as supply chain disruptions or technological changes can seem like reasons to hold back. Yet, companies that are willing to adapt and innovate during tough times often come out ahead. During the COVID-19 pandemic, for instance, restaurants that quickly pivoted to offering delivery services not only survived but often thrived, while others who waited for stability struggled.
Competitor Business Failures : When high profile companies fail, it’s easy to assume the same outcome could happen to you. However, every business is different, and one company’s missteps shouldn’t discourage you from pursuing your goals. Take the example of the dot com bust. Many companies failed, but businesses like Amazon thrived by focusing on long term strategy, innovation, and customer needs.
Understanding the Real Risk
It’s crucial to distinguish between risks that are truly too high and opportunities that might simply feel uncomfortable. Here are a few questions to help guide your decision making:
- What’s the worst case scenario of pursuing this opportunity, and can we handle it?
- Are we prepared for this opportunity, or do we need more resources?
- What will we lose by not acting on this opportunity?
- What could we potentially gain from pursuing this opportunity?
By approaching each decision with thoughtful analysis, you’ll find that some risks may not be as daunting as they seem.
Seizing the Right Moment
While it’s wise to proceed carefully, waiting for the “perfect time” to act can hold your business back and you may lose out on potential opportunities. Successful businesses don’t avoid risk, they manage it. So when you recognize a solid opportunity, it’s essential to evaluate it based on facts and potential outcomes, rather than fear or external factors that may cloud your judgment.
