It is always said that for a business “Risk taking is very important” and “Business is nothing without risks”. Even a famous dialogue from the web series, Scam 1992 says “Risk hai, toh ishq hai “.
Today, I(Dilip Sharma) got an opportunity to meet a very senior and experienced industrialist in the power generation sector. He is a qualified engineer and a member of many top-reputed industry associations like CII. But, I got this opportunity to meet him as a member of VCCI.
While discussing about future career plans and his great past experiences, he shared many incidents and stories from his career. But there was this one incident he shared that stunned me and forced me to think about it. Almost every businessman or entrepreneur has a similar type of incident in their life, the only difference is how they evolve with that experience.
During his mid-career era, he received a big purchase and supply order from one of the biggest government company in India, that is currently one of his regular clients. He received this order directly from top management on the basis of his last performance track record and the quality of his products and services. There might be no risk of payment and pricing, but after all these facts this industrialist humbly denied to the management that, this order is too big and I don’t want to do this project. He felt it would be a big risk.
When I heard this, just like anyone else, I thought that he should not have dismissed an opportunity like this. It could have made him a fortune and he might have been a tycoon in his industry as compared to what he is today.
But the important question is, why didn’t he do it?
This is not only the story of this businessman but we all have these similar stories in our lives. Everyone knows how to dig, but where to dig is important.
Everyone who is reading this true story may have different opinions. Some will agree with him; some will think he should have grabbed the opportunity, and their might be people with mixed opinions.
As we are aware that there are always some risks in everything. Whether we are driving, cooking, or even sleeping, there is always a chance of risk. If we think, everything is risky at some level,THERE’S ALWAYS A RISK.
Similarly, in any business, Specially for SME’s there are always lot of challenges and risk factors at every stage. The business owner often stands in a position where he has to decide if he can bear that risk or not. People usually says, a successful businessman is who take risks. This may be right in some cases for some people, but we should always remember that everything has its own pros and cons.
The incident that my senior friend shared was actually based on his experience. He got the opportunity, but he didn’t go for it, because he was not to pay the price if anything goes wrong.
But what if, he gets this opportunity again or something big similar to this.
Fears in Risk Taking!
First Fear: Financial Crisis
In the above mentioned incident, his reason for not taking the risk was that manufacturing capacity was 100 times less than what was demanded. Even if he tried, he might not have met the required quality in the given time period. In greed of what he was getting, he might have lost what he had.
If we see this in a positive point of views, his quality was good, the client was genuine and reputed, there were no issues of money, pricing and profit margin, also, he was in contact with the top management. So, do you think he should have gone for it with the help of some investors, banks loans or expanding the team.
One of the possibility was that he was afraid of losing his brand value at the time of failure. He might lose his market reputation as well as his peace of mind and won’t get any other business opportunity in future.
“The biggest risk is not taking any risk.” – Mark Zuckerberg, chairman, CEO, and co-founder of Facebook
Third Fear – How bad do you want it?
In business you always have to take risks at a certain point of time.
But how much risk? We opt for it. It is always important to take calculated risks. In this case for him, it was hundred times bigger than his capacity. But we could reduce this and break it in small parts.
Fourth Fear – Legal Compliance
As we all are governed by law of state, for every action, deeds and activities we are covered under some acts of state. Before initiating any project, we should check legal compliances and its results. This might be a big thought in the mind of industrialist who got the chance.
Fifth Fear – Planning and Execution
Often, we get opportunities out of nowhere and if we are not ready for that, so we throw it out. It has happened with many of my friends. That is, how he would execute such a big order and what should be the strategy. And in the hurry, he decided not go for it or he did not have enough time to think and revert.
On the other hand, if you are in business and you are working with such big clients than you should always be ready for such big opportunities.
“Turn a perceived risk into an asset.” – The founder of Mint, Mr. Aaron Patzer
Summing up, this story tells us that if we are in business, we should be ready in advance for such opportunities. We are giving a Document for Risk Analysis which can help you to plan for the future.
“Risk comes from not knowing what you’re doing.” Warren Buffett
The whole team of ExpertGraph is always ready to help you in pre-planning and long-term planning for your business. That will help you to grab such great opportunities and be in the top corporates of India.