Risk is the forgotten element of the business plan

Any business plan we develop needs to consider a number of factors when assessing the timeframe for progression and the targets that will reflect it. When we make a business plan, it is our ambition that drives us; an ambition to succeed, to make a difference, and ultimately to leave a legacy that just might immortalize us in the eyes of the public. We consider budgets, marketing, staff, expenses…but there is one element that has been so fundamental to many of the most successful businesses that we tend to forget.

‘Risk’ is a frightening word, with negative connotations that might actually belie the positive associations that are also attached. Some of the great leaders in the business world – Bill Gates, Steve Jobs, Mark Zuckerberg, etc. – can attribute many of the greatest leaps in their success to the risks they took. It is a sign of a true leader when a person is willing to take a calculated risk that could pay dividends if the execution is carried out in just the right way.

Don’t misinterpret this principle as an excuse to gamble your business’ future on the possibility of a big payoff – remember, we’re talking about risk as a forgotten element of the business plan. Excess in the risk department is nothing more than recklessness, and this certainly isn’t the mark of a true leader. But if you can factor calculated risks into your plan at just the right moment, you might just have what it takes to become one of the great leaders of our time.

Of course, the other side of risk being a factor in planning is the ability to perceive that there is risk associated with certain moves, and plan accordingly. When planning certain marketing strategies or growth options, the true leader will recognise when there is genuine risk attached with particular actions. And the true leader will be able to come up with contingency plans both to capitalize on a successful risk or salvage something out of a failed one. Taking your business’ future for granted, even in the face of seemingly minor risks, could be just the thing that leads to your business failing.

Take calculated risks in order to succeed, but don’t ignore the ‘risk’ element when planning, or you may find yourself without a business to run. For more advice on how to plan for risk, get in touch with us at St Andrew’s Highway.

Image credit: Risk Key by Got Credit licensed under Creative commons 4