3. Face-to-Face Communication
New environments will also expose you to new people. Face-to-face communication isn’t dead; it’s vital. Though Twitter and text-messaging are teaching Millennials to condense language, entrepreneurs still need formal verbal communication skills. Concise verbal skills will increase your ability to work with others, while simultaneously increasing your risk tolerance.
It may be more comfortable to tweet a colleague, but it’s certainly not going to help develop your relationship with him. Getting out of your routine and starting a real conversation with him, where you can see his facial expressions, hear his tone, and read his body language, will get you further than 20 tweets could.
4. Support Systems
Another way to increase your risk tolerance is to surround yourself with an excellent support system. Though an entrepreneur might discover an opportunity, he or she will eventually need others’ help to pursue the idea. The best way to do this is by “loading the bus” with people who “get it.”
Choose to associate with people who understand where you are trying to go with your ideas. There will always be naysayers, but the ability to develop an idea and stick with it will serve you well as an entrepreneur; surrounding yourself with positive influences enhances your chances of making it through rough patches. With confidence in those around you – and their confidence in return – your risk tolerance will grow exponentially.
Don’t forget that mentors – people who’ve been there and done that – are great sources of support, too. Someone who’s started a business and clawed his way up can teach you a lot more than anyone else can. Seek out those who understand exactly where you’re coming from so you can test ideas.
5. Financial Risks
But even with analytical experience and a great support system, monetary risks can still be unnerving. A financial risk tolerance should be established before tackling your first venture. Begin with bootstrapping; starting with a service-based business can be an excellent way to take a risk without considerable startup capital.
Other startup financial tricks include short payment terms, under-staffing, and focusing on cash flow. Cash must be king, and focusing on cash will minimize financial risk tolerance and grow your business in no time. You can’t get anything back if you’re always putting money out – that’s important to remember as you’re getting started. It’s the fastest way to go out of business.
The skills learned in EA’s program act as an out-of-classroom talent incubator. Development within the program is vital for students growing as entrepreneurs. But you don’t necessarily need to be a part of EA to develop your risk tolerance. By accepting these challenges, you can quickly increase your risk tolerance and learn skills that will help you flourish as a young entrepreneur.
Everyone has to start somewhere, and viable entrepreneurs don’t blossom out of classrooms. You have to push yourself to develop your risk tolerance – it’s called “risk” because you don’t do it every day. Entrepreneurship is all about taking the initiative to find opportunities and assess the risks of each.
Using these techniques to develop your risk tolerance will eventually allow you to view even the largest risks – and rock-climbing walls – as surmountable.
Photo Credit: Qipai
Dr. Greg Bier is a Professor of Management at the University of Missouri. He leads the newly formed Entrepreneurship Alliance in the Robert J. Trulaske Sr. College of Business. Greg is also a partner of MO.com. Follow Greg on Twitter @GregBier.
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