Risk is an inherent part of any trade and logistics business, big or small. How you handle risks and the decisions surrounding them can make or break your venture.
No matter how experienced you are as an entrepreneur or a small business owner, taking risks is one thing that can always trip you up. However, without taking them, your trade or logistics business will never have the opportunity to really grow and flourish in the direction that it needs to. The key is to weigh up the risk versus the potential gains and to make your decisions based on these facts.
It’s also important to remember that there is a fine line between taking an unnecessary risk and making a bold decision. The one will see you in trouble, and the other will be applauded as a stroke of genius for going that route. As the business owner, it’s your job to work out if a decision is good or bad. In other words, is taking a chance worth the risk?
UNDERSTAND THAT IT’S PART OF BEING A BUSINESS OWNER
Taking risks is all part of the job description of being a business owner, especially in the startup world and trade and logistics industry. You have to use your reputation and often your own money to get your venture off the ground. This in itself is a risk. You need to prepare to put yourself out there and go for the bold choice if you want to reap the rewards.
PLAN FOR THE WORST, HOPE FOR THE BEST
Just because decision-making, and mostly big decisions, is part of the job, it doesn’t mean that you should just go for it. Any business owner who jumps into a decision without proper planning or research is asking for trouble, making each decision far more of a risk than it needs to be. Planning is critical.
Experienced trade and logistics business owners will look at a decision from all angles, plotting out the various outcomes of courses of action. For many, the most important factor to consider is what the worst-case scenario is if they go ahead with their decision. By figuring out the worst-case scenario, you can see if you and your business can survive should things go wrong when taking a risk. It’ll also help you put mitigating factors in place to help prevent the worst-case scenario from happening.
With all of this planning and research done before deciding, you’ll find that the associated risks are somewhat diminished. Or, you’ll realize that the risks are too great and you won’t need to make a decision at all.
GET USED TO MAKING IMPORTANT DECISIONS
As with just about anything in life, the more you do it, the easier it becomes. The same is true about having to make big decisions. You can reach a point where you can confidently make business-altering decisions without too much stress. It’s just important to ensure that you always do your planning and research first, and don’t get overconfident.
You’ll also likely find that over time you don’t need to do as much initial research or planning. This is because you will be comfortable enough with your business to see the possible outcomes of the decision more easily. You will also have several contingency plans already in place, thanks to previous decisions you’ve had to make.
TRY THE PHASED APPROACH
The most important factor to consider when making decisions for a small business is that you can’t always afford to take a big risk. Your resources are generally less than a larger organization, and that can make it a lot harder to recover if things go wrong. This means that it’s often better to go in a phased approach—making smaller changes or taking smaller risks over a period of time to get to the same outcome as one big leap of faith.
This is a good strategy early on in the life of a trade or logistics business because it builds up a resilience and a better tolerance for risk. You can take the time to build up your resources or recover to a place where you are ready for the next step or phase. All the while, your business is moving forward and not stagnating.
KNOW WHEN TO TAKE ACTION
There are some risks that are easy to evaluate, and taking action is common sense. For example, if your business is in an area that’s prone to break-ins, not having a properly installed safe is a risk that’s not worth taking. Spending the money and installing a safe is a non-negotiable. But with other businesses risks, the answers aren’t always so cut and dried.
The place where most people get tripped up is getting too weighed down on the details of a decision. You can end up going round and round in circles, and miss the opportunity to take that leap.
You cannot wait forever or until things are just right to take a risk or make a big decision. Learn when the time is for research and planning, and when to take action. It all needs to be part of the process—researching possible outcomes, getting advice and input from others, planning for the worst, and then deciding to go or not to go. Inaction is far worse for a business than deciding not to take action.
DON’T BE AFRAID OF FAILURE
There will always be the possibility of failure when making big decisions for a small business. There is no way to avoid this entirely. However, you can’t live in fear of failing because if you do, you will never see your business reach its full potential.
Failure is also a great teacher. Making a mistake or taking too big a risk gives you the chance to learn from those outcomes. You’ll be in a far better place to evaluate a risk next time one comes along because of the experiences you’ve had through failure. In fact, most entrepreneurs will tell you they have experienced far more failures than successes in their careers, and happily learned valuable lessons each time.
The trade and logistics business offers plenty of opportunity for risk taking and making bold decisions. With knowledge, experience, and insight, you can grow your venture in the right direction and carve a niche in an industry that’s highly competitive and demands forward thinking.