Thursday, March 1, 2007/
Are you a Michael Bevan or an Adam Gilchrist? Do you have the appetite for risk a true entrepreneur needs for success?
Risk versus reward
I am a big cricket fan, so this week I offer an apology to those who aren’t as I discuss risk versus reward.
Are you a Michael Bevan or Adam Gilchrist? Do you consistently make a quick single or do you dance down the pitch looking for the boundaries? The answer will tell you a lot about whether entrepreneurship is right for you and, if so, what style will best suit you. Understanding your attitude towards risk and reward threshold is essential for an entrepreneur.
Gilchrist is one of the world’s fastest-scoring cricketers and Bevan holds one-day records for accumulating runs. In one-day matches, Gilchrist has been out for 16 ducks and Bevan five. When you swing for the boundaries, you strike out more than when you just try to consistently nudge runs.
So are you a Bevan or a Gilchrist? What’s your tolerance for risk versus reward? Employees tend to be more likely to nudge singles, and entrepreneurs tend to swing for the boundaries. That’s not a hard and fast rule, of course.
The underlying question has to do with your tolerance for risk and desire for higher reward. For all the talk about the high salaries of corporate CEOs, the reality is that most millionaires are self-employed professionals or entrepreneurs. Yet most strike out a few times. I have and this needs to be considered before you head down the entrepreneurial path.
How much risk are you willing to tolerate for the expected reward?
Every day provides me an exciting opportunity, although I feel I am more strategic these days. It is still as though I am rolling the dice with each venture: will I roll a six today or a one?
The best thing about being an entrepreneur is I have the ability to roll sixes.
You have to have a realistic idea of the risks involved, and the level of risk you’re comfortable with, before you step up to the crease and start swinging.
Here are some things to consider
An entrepreneur is a person who perceives the market opportunity and then has the motivation, drive and ability to mobilise resources to meet it. The main characteristics of entrepreneurs that have been listed by many commentators include that they possess:
- Self-confidence and are multi-skilled. The person has the drive to forge through un-charted waters.
- Confidence in the face of difficulties and discouraging circumstances.
- Innovative skills. Not an “inventor” in the traditional sense but one who is able to carve out a new niche in the marketplace, often invisible to others.
- An orientation to achieving results. To make be successful requires the drive that only comes from setting goals and targets and getting pleasure from achieving them.
- A taste for risk. Succeeding means taking measured risks. Often the successful entrepreneur exhibits an incremental approach to risk-taking, at each stage exposing themselves to only a limited, measured amount of personal risk and moving from one stage to another as each decision is proved.
- Total commitment. Hard work, energy and single-mindedness are essential elements in the entrepreneurial profile.
Are you this person? If so, it may be time to stroll out to the crease.