Risk Taking: A Double-Edged Sword
To grow your business you must take on a certain amount of risk. Unfortunately, those same risks could cause you to lose everything. Luckily, some risks are less risky than others. Refer to your business plan to see how new business ideas fit. Will these new ideas really help your business achieve yearly or quarterly goals? Do these ideas fit in with your business's mission? How much will it take to implement new business ideas at this time?
Financial documents to review include: Income statements, balance sheets, invoices, tax records, and bank statements. You need to have a clear understanding of what assets your business currently has and how much it will cost to launch a new product, service, or expansion. Even if your idea requires you to hire additional help, you need to be able to pay for it without losing too much.
Taking Risks Slowly
Rather than an 'all or nothing' approach, some business owners break ideas into manageable phases based on current income, labor, and available cash flow. Some business owners also take time (two or more years) to see an idea come to fruition. Don't be afraid to break your idea into smaller pieces. Once you start implementing phases into your business, you may discover unanticipated issues or discover easier ways to reach your business goals. Either way, be prepared for the unexpected (good and bad) when taking risks. Be prepared to change directions (again, good or bad), and don't be opposed to abandoning or shrinking your ideas if necessary to preserve current business operations.
Some ideas look really good on paper – even after going over financials, setting up roll-out phases, and seeing small results. But there are instances in life we can never control or predict like: bad weather, employee turnover, increased competition, economic meltdown, fickle consumers, etc. Knowing when to let an idea go and when to start thinking about new ideas depends on many factors. Only you can determine when to let it go and start all over again. But never look at this as failure – it's just business.
Learn from the past while looking to the future – one lesson that anyone who has taken risks in life (and in business) knows and continues to glean wisdom from.