Taking risks isn't for everyone. Many people are cautious about the decisions they make, especially decisions concerning their finances and their future. The word "risky" may even hold negative connotations for some people. But if you're willing to make the leap and take a risk, you may be more likely to succeed.
According to new research from the University of Cambridge, risky decisions can lead to business success. Findings from these studies show that entrepreneurs tend to make riskier decisions when compared to managers who are employed by a company. And for these entrepreneurs, the risks pay off with the heightened potential to succeed.
What risks do entrepreneurs usually take? For starters, rather than working for another company, they are starting their own. By doing this, they are risking their:
- Finances
- Reputation
- Family stability
- Self-esteem
There is a lot at stake for entrepreneurs who decide to start their own business. However, these new studies prove that not all risk-taking is bad. According to professor Barbara Sahakian, lead author of the study at the Behavioural and Clinical Neuroscience Institute at Cambridge, "...risky or 'hot' decision-making is an essential part of the entrepreneurial process and may be possible to teach, particularly in young adults where higher risk taking is likely and age-appropriate."
The published study shows that risk-taking behaviour can be taught, or even enhanced through pharmaceutical drugs.
However, it is important to engage in what prime minister Gordon Brown calls "responsible risk-taking."
Franchises can mitigate some of this risk by providing a proven business system and ongoing support from the franchisor, who has already taken the leap and started a new business. By learning from their mistakes and using their tried and tested methods, you can take the risk to start your own business, but also have the assurance of back-up from an established company.