3 ways small business can embrace risk-taking to fuel growth

- August 23, 2022 2 MIN READ

Small business needs to embrace risk-taking to think big and win, says advertising expert Lauren Fried.

Meta creator Mark Zuckerberg hit the nail on the head when he said: “The biggest risk is not taking any risk.”

There are basically two types of risks. One is to throw caution to the wind and win big or lose big (that’s how many start-ups begin). Or two, instate constant risk into your business, where process and core offerings are iterated without betting the whole company on it.

Businesses that haven’t embraced either form of risk into their operations are likely to have problems. Risk is a mindset that needs to be embraced across the business as well, not just from the leader.

The world is changing so fast, as are the needs of business. Just ask Blockbuster why it went bust. Small businesses can be nimble and think big – and win.

Here are three ways small business can embrace risk-taking to fuel growth.

1. Practise saying yes

The urge to say no to a new idea can creep into small businesses. Privately owned small business carries a lot of risk, both for the actual business as well as their family financial responsibilities. But remember, you don’t always have to bet everything you have on it. It’s actually better to create a culture of friction to saying no.

Just take a look at Amazon who created the “the institutional yes”. This means if anyone comes to a manager with a great idea, the default answer has to be yes. And if it is no, the manager is required to write two pages explaining why it’s a bad idea.

2. Experiment, experiment, experiment

Remember Blockbuster? Netflix, a fledgling company in 2000, proposed a partnership with the film rental giant. Netflix would run Blockbuster’s brand online and Blockbuster would promote Netflix in its stores. However, Netflix was laughed out of the room. But it was Blockbuster that ultimately paid the price, going bankrupt in 2010.

Netflix is now a $US100 billion dollar company and Blockbuster is… well, busted. This is the perfect lesson for staying open minded to change – after all it’s the only constant in life and business, and keeps things interesting.

Also, take a look at Airbnb and Uber. These companies are constantly experimenting with their internal operations and structure – from their business philosophies to how employees interact with one another, how they measure performance and even their attitudes toward risk. As a result, they stay relevant and ahead of new competitors.

3. Bank on your brand

Without the large budgets of the bigger businesses it can seem daunting to market your brand. However, as a smaller business it’s actually easier to take some calculated chances – you’re not bogged down by all that red tape.

Too many layers of decision makers can make it hard for big business to be flexible and daring with their branding. The sooner you get your idea out into the market, the sooner you get feedback (or better still sales!) and the sooner you can evolve it.

Calculated risk-taking in marketing can be priceless for brand exposure. Take supermarket chain Aldi for example. They’re the ‘underdog’, sitting in the shadow of Coles and Woolworths. Yet their advertising is quirky and sometimes unexpected. Their risk is reduced because they’re not the market leaders, but their advertising is definitely attracting the right attention.

This article was originally published in 2016 and has been updated for 2022.

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