Risky Home Business

When you launch a start-up you put everything on the line.  To this end it is important to ask yourself" “Can I risk this?” Since risk is a non-negotiable when it comes to entrepreneurship, your task is to identify your baseline—the level of risk that you are comfortable with—then learn how to manage it.

Can you handle it?
Risk is defined as the potential that your actions could lead to a loss; an undesirable outcome. When you establish a risk baseline, it should serve as the basis for measurement of all other actions surrounding your business. For example, the lowest possible baseline could be “If I do X, and it leads to a loss, I won’t lose sleep over it – I can handle it.” Here’s how to set a baseline.

• Develop a list of business risks that you’d like to take within the next 30 days.
•Next, assign a measurement of risk to each line item (Low, Moderate or High).
•Then develop what I like to call, an “I Can Handle It” column that denotes a) I can handle it or b) I can’t handle it.

Once you review this basic list, you’ll have a better idea of where your risk threshold lies. Now that you understand your risk tolerance, it’s time to manage it.

Risk Baseline
Now that you’ve identified and assessed your risk-baseline, you’re ready to manage it. Managing it could mean a couple of things. You can a) do nothing b) transfer risk or c) minimize risk to ultimately take your results from undesirable outcomes to more desirable situations.

When faced with risk, most of us do absolutely nothing. However, inaction is also a choice that will affect your business.  As a rule of thumb, you can control one variable in your business: you.  Decide how you are going to manage the risk you’ve outlined above. You can do one of three things:

•Minimize and reduce risk by creating a backup plan (Plan C) for the backup plan (Plan B).
•Transfer risk by outsourcing internal operations to highly qualified and specialized third parties with a vested and monetary interest in getting it right the first time.
• Or accept the risk. This means preparing for a loss and develop safeguards to ensure a gain. For instance increase the dedicated resources, such as money, staff and time to a specific project and cutting back focus in other areas.


Just because something sounds good, looks good and feels good doesn’t make it a worthwhile risk. Pay close attention to the opportunity, the risk and the reward. Don’t take blind risks.  Calculated and deliberate risk taking is essential to the growth of your small business. Information and action are the key ingredients to increasing your risk tolerance. Team up with people that have the information or skill set that you need.