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Fear of failure part of entrepreneur's journey

Jun 26 2014 13:56
Fin24
Johannesburg - By nature, entrepreneurs are to a degree risk takers, said Christo Botes, spokesperson for the Sanlam/Business Partners Entrepreneur of the Year competition.

It is likely that they have taken a big risk by leaving a corporate environment and a steady salary to start their own business.

The reality, however, is that many entrepreneurs are more cautious and risk-averse than what they are perceived to be.

"The fear of failure is a common occurrence in any entrepreneur’s journey and this fear can discourage business owners from taking the essential, calculated risks needed to further develop and expand their business," said Botes.

“They can also sabotage their own success by falling into a comfort zone, ultimately prioritising their fear of failure above the search for success."

This fear can inhibit a business from remaining innovative, which is necessary in an ever changing economy faced with differentiating consumer demands.

Botes said calculated risk is an integral part of a business and entrepreneurs should look at it as an opportunity and challenge to overcome the unknown and in the process, grow their business.

“Having the ability to spot an opportunity, investigate the options and then take the calculated risk is what sets entrepreneurs apart from others that may take reckless risks,” he said.   

“Entrepreneurs who are able to take calculated risks and manage them are able to find a balance between maintaining a need for security, while making decisions needed for the future success of their business."

This equilibrium is a crucial trait that a business owner should posses.

Botes offers practical tips to manage risks:

Know your customer base
 
Interact regularly with your customers and employees and make a concerted effort to stay up to date with new technologies that may benefit, or hinder, your business.

If you are aware of what your market requirements are ahead of time, you can minimise your chances of loss.

For example, this type of research will enable you to avoid costly mistakes, such as entering a new product that wouldn’t appeal to your customer base.

Embrace risk by establishing short term goals
 
Get comfortable with the idea of risk, as it is part of your daily business operations and will play a major role in determining your success as an entrepreneur.

Start by setting achievable goals that you will be able to accomplish in a short period of time.

Achieving these short term goals will give you the courage and experience to avoid decisions which carry greater risk for your business later on, without being discouraged by the fear of potential losses.  

Know your market environment
 
Information and research are the key ingredients to increasing your risk tolerance.

The best way to manage your risk is to create a deep understanding of the market the business is operating in.

Being familiar with the opportunities and risks in your marketplace will give you an advantage over your competitors and enable you to distinguish more easily between risk and danger.  

Seek advice from fellow entrepreneurs
 
Becoming an entrepreneur is risky no matter how you look at it.

However, by seeking mentorship from seasoned entrepreneurs you will empower yourself to unleash your own and your business’ full potential.

The more you know, the less you fear. If you're having difficulty accomplishing goals, you could seek mentors that have the skill set that you require for the issue at hand.

“The secret to entrepreneurial success is to aim for the maximum reward for the lowest risk possible, but this is not always possible in a competitive business environment," said Botes.

"To be successful, an entrepreneur must, therefore, have the ability to calculate and consider the risk and then commit themselves to their decision to ensure results."

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Fin24

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