The Myth of Entrepreneurial Risk-Taking
The Myth of Entrepreneurial Risk-TakingEngineering
EntrepreneurshipSecond Semester of A.Y. 2014/2015International
Program Civil Engineering DepartmentFaculty of
EngineeringUniversitas Atma Jaya YogyakartaEveryone seems to have
their own "Top 10 list of entrepreneurial qualities" these days,
and risk-taking almost always makes the Top 3. But is this really
true? Do savvy entrepreneurs simply throw caution to the wind and
fly in the face of danger when it comes to taking risks? Let's
examine this "myth of entrepreneurial risk-taking" more closely.As
entrepreneurs, everything we do has both an upside and a downside.
We frequently makebusinessand financial decisions depending on the
level of risk involved. In fact, determining risk is a key factor
in running a business-those that are good at it succeed and those
who aren't all that good at measuring risk frequently fail. It's
what makes the world of business go around.Instead of taking risks,
it's more about limiting risk.Again, everything we do as
entrepreneurs will have some degree of risk involved. Risk is just
inherent. But this doesn't necessarily mean that taking risks is
the secret to success. To the contrary, most entrepreneurs get to
where they want to be by limiting their exposure to risk instead of
proceeding blindly withoutregardto it.How is risk limited?There are
a countless number of techniques that business executives and
entrepreneurs use to limit their risk factors, including (but never
limited to) the following:Performing meticulous research and
planningFaithfully testing, tracking, and analyzing resultsTurning
to education as a resourceRelying on statistical
formulasMaintaining appropriate levels of insuranceUsing a proven
plan instead of trying to reinvent the wheel
And we definitely shouldn't forget the most common method of
limiting risk-using good old-fashioned common sense. There are
thousands and thousands of actual ways to limit risk. They're not
necessarily all easy to define, but these concepts kind of give us
a good representation of methods that are used every day in
businessDiscerning the myths from the truth...The notion that
entrepreneurs are risk takers is just completely false. In fact,
this is probably just about the single largest misconception about
entrepreneurship that there is. Business people that produce
resultstime and time again actually do everything they can to get
ahead in the game while taking on as little risk as absolutely
possible.Some people just get lucky, but by no means is being a
wildly successfulentrepreneurabout taking a gamble. Persistent
trial and error, using the risk limiting factors we've discussed
above all the while, is how most entrepreneurs get from point A to
point Z as they define the path to their business goals.To take
risk is foolish!And to say otherwise is just irresponsible.
Entrepreneurs have it hard enough-financing isn't always easy to
come by; winning business ideas and working models are just as
difficult to source. Why would we want to waste the resources we've
worked so hard to realize and limit our chances of succeeding by
taking unnecessary risks?Instead, as entrepreneurs, we should
always think first in terms of accurately planning before acting
and reducing our exposure each step of the way. Above all, we all
need to remember that the concept of entrepreneurs being risk
takers is just not reality.
