Financial Risk Videos

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All too often in today?s business world the concept of risk, both calculated and spontaneous is often overlooked as the strongest common denominator amongst successful businesses. Now this does not mean that you have to go out and bet everything you have on your idea in order to be successful, in fact, many successful individuals have made their wealth by minimizing risk in various business and financial dealings. The idea here is to be conscious of what type of risk you need to take, in order to receive the reward you are looking for. A good example of high risk takers in business are first time entrepreneurs. When starting a business for your first time it is very natural to have great drive and ambition which pushes you to take great risks. At this stage in development most entrepreneurs have not been burnt or hurt by past business dealings, so they are very eager to try all sorts of new things. This level of risk can be tremendously advantageous to entrepreneurs. This stage offers entrepreneurs the ability to grow very quickly with proper planning and execution of operations through calculated and spontaneous decisions. At later stages in business growth and development it is easy to become more risk adverse as you have a greater grasp on the operation and the pitfalls that can occur. Another example of risk vs. reward you can find in the stock market. When you make the decision that you are going to get into the stock market there are really only two ways to approach it, one being a conservative approach with long term goals in mind, the second being a more aggressive approach where you are looking for a short term play. On one hand you might think that you should buy 10 of the top blue chips stock in the country. It isn?t very risky because you are almost certain you will get a good return from them over the next 10 years or so, but it will produce a nice return in ten years. On the other hand you might decide that you absolutely love this new Hydrogen Fuel Company and what they are doing. You decide that the world is moving towards hydrogen cars and you decided to invest all your money in this company. Now this would be very risky based solely on the fact that you have no established trading history for this company and the hydrogen market is yet to evolve. However, this return could offer you ten times what the blue chips will provide, and this stock potentially could pay it back in 4 years. The concept here is to understand the risk that you are taking, and what the potential downfall will be, as well as the reward. When deciding to go into your own business, you really need to think about the two ideas we just spoke about. Most business owners come out of the gates very ?gung-Ho? and want to tackle the world and make their mark as quickly as possible. This type of attitude and motivation is what has driven some of the greatest entrepreneurs of our time and it has become and model for American success. I urge all new business owners to take risks when they first start out, you should always calculate the risk in the beginning stages, but you can?t be afraid to take steps that you don?t feel 100% comfortable with. At the same time 80% of all small businesses do not make it past their first year of operation, so this should be a very clear sign that risks do not always end with the reward you expected and new business owners should take note of this percentage. When running a business and trying to grow your operation, the stock market example is best used to explain your risks vs. reward. When you have established your business and you are looking to expand, think of it has having a lump of money that you are getting ready to invest in stocks. You can either put all the money that you have made working from the ground up into one very lucrative but potential high paying stock, or you can diversify your money into safer stocks with lower returns. As an established business owner you need to find a happy medium between diversifying your business assets and placing them all in one basket. When trying to grow an existing business, it always takes a jolt or kick -start to stir up clouds of excitement about the business. This kick-start can come in the form of a big publicity stunt or major expansion of the business. It can also come from a calculated advertising campaign and targeted business meetings with new clientele. Making the decision as to how risk adverse you should be can be a very tough choice. However, if you understand the risk and reward associated with each side of the situation you will be better equipped to deal with the end result. Business Strategy, Business Risk, Analyzing Business Risk, Business Podcasts, Growing your business, entrepreneur If you are looking to start, grow or expand your business, please contact the associates at The Motivated Entrepreneur, www.MotivatedEntrepreneur.com