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The Myth of

Entrepreneurial Risk-Taking
Engineering Entrepreneurship
Second Semester of A.Y. 2014/2015
International Program
Civil Engineering Department
Faculty of Engineering
Universitas Atma Jaya Yogyakarta

Everyone seems to have their own


"Top 10 list of entrepreneurial
qualities" these days, and risk-taking
almost always makes the Top 3. But
is this really true? Do savvy
entrepreneurs simply throw caution
to the wind and fly in the face of
danger when it comes to taking
risks? Let's examine this "myth of
entrepreneurial risk-taking" more

As entrepreneurs, everything we do
has both an upside and a downside.
We frequently makebusinessand
financial decisions depending on the
level of risk involved. In fact,
determining risk is a key factor in
running a business-those that are
good at it succeed and those who
aren't all that good at measuring risk
frequently fail. It's what makes the

Instead of taking risks,


it's more about limiting risk.
Again, everything we do as
entrepreneurs will have some degree
of risk involved. Risk is just inherent.
But this doesn't necessarily mean
that taking risks is the secret to
success. To the contrary, most
entrepreneurs get to where they
want to be by limiting their exposure
to risk instead of proceeding blindly
withoutregardto it.

How is risk limited?


There are a countless number of techniques
that business executives and entrepreneurs
use to limit their risk factors, including (but
never limited to) the following:
Performing meticulous research and planning
Faithfully testing, tracking, and analyzing results
Turning to education as a resource
Relying on statistical formulas
Maintaining appropriate levels of insurance
Using a proven plan instead of trying to reinvent
the wheel

And we definitely shouldn't forget the


most common method of limiting
risk-using good old-fashioned
common sense. There are thousands
and thousands of actual ways to limit
risk. They're not necessarily all easy
to define, but these concepts kind of
give us a good representation of
methods that are used every day in
business

Discerning the myths from the


truth...
The notion that entrepreneurs are
risk takers is just completely false. In
fact, this is probably just about the
single largest misconception about
entrepreneurship that there is.
Business people that produce
resultstime and time again actually
do everything they can to get ahead
in the game while taking on as little
risk as absolutely possible.

Some people just get lucky, but by


no means is being a wildly
successfulentrepreneurabout taking
a gamble. Persistent trial and error,
using the risk limiting factors we've
discussed above all the while, is how
most entrepreneurs get from point A
to point Z as they define the path to
their business goals.

To take risk is foolish!


And to say otherwise is just
irresponsible. Entrepreneurs have it
hard enough-financing isn't always
easy to come by; winning business
ideas and working models are just as
difficult to source. Why would we
want to waste the resources we've
worked so hard to realize and limit
our chances of succeeding by taking
unnecessary risks?

Instead, as entrepreneurs, we should


always think first in terms of
accurately planning before acting
and reducing our exposure each step
of the way. Above all, we all need to
remember that the concept of
entrepreneurs being risk takers is
just not reality.

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