Many successful entrepreneurs employ goal-setting and goal-tracking practices to help them stay on course and turn their visions into reality. Many different goal systems exist, but the primary utilities of each are to set goals, develop measurable tasks for each goal, and to track your performance of each task until your goal is attained. However, most of the goal-setting systems I’ve come across omit a critical aspect of business goal-setting: risk.
Living Social’s Tim O’Shaughnessy said “If you’re not nervous about one or two decisions every day, you’re probably not trying hard enough.” The quote stands as one of the most poignant observations about modern entrepreneurship, and it’s the reason why I incorporated a new term into my own daily goal tracking system: risk forward.
Risk forward is the term I’ve given to the practice of making sure you’re taking at least one risk to grow your business on a daily basis. That is to say, every day you should take some action that involves a level of risk, for which the outcome has the potential to grow your business.
The risk doesn’t have to be do-or-die; in fact, it should be a calculated risk that has a good chance of success. Let’s say you’re a mechanic who owns his own shop. On one day you could take a risk on launching a postcard campaign. If the postcard campaign succeeds, you’ll have new customers and increased profits. If it fails, you’re out your investment; but that investment shouldn’t be so large that it would also cause your business to fail.
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Another risk, using our mechanic example, would be to give an employee license to make managerial decisions when you’re not available. If the risk pays off, you’ll have more free time to work on growing your business. If it fails, your employee could make a mistake that costs your business money. Again, it should be a calculated risk – your employee should have undergone training first and you should be confident in your employee’s decision-making abilities.
We’ve all heard that the reward potential runs parallel to the level of risk, but this doesn’t mean you have to bet the bank on a daily basis. Risk forward is about making moves that have the potential to propel your business and profits. It’s easy to get comfortable as a small business owner, but settling into a groove is the greatest risk of all: If your biggest client jumps ship, or you ignore industry change, you could find yourself running a business that is no longer profitable.
By implementing risk forward into your daily goals, you’re able to ensure you’re on top of your industry and consistently working to grow your business, thus securing long-term sustainability and success.