All of Life is a Risk of Some Kind

Whenever you engage in any action where the outcome is uncertain, for any reason, you are taking a risk. You take a small risk when you drive to work or walk across the street. You take a larger risk when you start a business or invest a sum of money.

You take a risk whenever you venture into the unknown, where your possibilities and probabilities cannot be determined to an exact degree. From the time you get up in the morning until you go to bed at night, and even when you are sleeping, you are facing risk to some degree.

The issue, then, is not whether or not you take risks. The issue is how skillful you are and, therefore, how confident you are in taking the right risks for the right reasons in pursuit of the right goals or objectives.

It is a fact that every great leap forward in human life begins with a giant step of faith into the unknown. Men and women who accomplish wonderful things are invariably men and women of great faith and confidence in themselves and their abilities.

The better you become at analyzing and assessing risk, and then avoiding as much of the risk as possible, the more competent and more capable you will become, and the more successful you will be.

Five Types of Risk

There are basically five types of risk for you to consider. The first type is the simplest.

1. It is the risk that is not yours to take. It is the decision that you do not have to make or the gamble that you do not have to engage in. Every action has an equal and proportionate reaction and often creates the need for further actions either to follow up on or to remedy what happened.Whenever you can delegate an act entailing some uncertainty, you can reduce your risk of losing time and money and can increase your likelihood for long-term success.
2. The second type of risk is the risk that is unnecessary. You engage in an unnecessary risk when you act precipitously, without sufficient information or without taking time to think it through carefully in advance. Peter Drucker, the "Father of Management" said, “Action without thinking is the cause of every failure.” Many of the mistakes that you have made have occurred because you acted without thinking—that is, you acted without taking the time to minimize the risks involved.
3. The third type of risk is the risk that you can afford to take. Calling on a new buyer, following up on a tip, and exploring a new opportunity all are risks that you can afford to take. In these cases, the cost of failure is very low, while the rewards of success can be very great. Buying an inexpensive product or service, trying a new restaurant, and going out with a new person all are risks entailing uncertainty that you can afford to take because the down side is limited. Perhaps the worst that could happen is that you would experience a little bruise to your ego.
4. The fourth type of risk is the risk that you cannot afford to take. The consequences of making a mistake would be too enormous. You cannot afford to bet your whole company or your whole bankroll on a speculation of any kind. You cannot afford to commit all your resources to a single project and have your entire success or failure hinge on the outcome of that project.Many salespeople make the mistake of working on one very large prospect and gradually curtailing their efforts to develop a series of smaller prospects. From everything that I’ve heard and seen, whenever a salesperson does that, the large prospect always fails to materialize, and the salesperson is left with empty hands and an empty pocketbook.People in the world of investing talk about the importance of spreading one’s risks. No individual and no company should be dependent upon one or two people for their financial well-being. One of the best ways to minimize risks is to develop alternatives to what you are currently doing. The more alternatives you have, the lower your risk, and the higher your likelihood of success.
5. The fifth type of risk is the risk that you can’t afford not to take. The downside may be costly, but the up side is so exciting that it is very much worth taking a chance to go after it. If you are working on a big prospect whose headquarters are a long way from your main office, it’s certainly a risk to travel all the way there and back several times, but it’s a risk that you can’t afford not to take. If the prospect materializes, it can make a major difference to both you and your company. Sometimes you will be given a job opportunity that you can’t afford not to take. Although there is always a potential loss involved, the up side may be tremendous.

Assess the Outcome

One of the best of all exercises, in every situation involving uncertainty, is to  assess and evaluate the worst possible outcome. Ask yourself, “What could possibly go wrong in this situation?”   To learn how you could develop the courage to take educated risks and ultimately gain high rewards, please click here

To Your Massive Success

Claudeville Mc. Garrell

CMASSOCIATES

Tel: + (592) 651 9846