Wednesday, September 26, 2012

Entrepreneurs: The Risk Taking Spirit

Entrepreneurs need to be armed with a risk taking spirit to make the bold moves necessary to start a new business from scratch. The would-be entrepreneur has an idea for a business, along with a vision of how to execute it. Driven by the will to realize their vision and armed with confidence, the true entrepreneur sees opportunity and acts on it. They bring a flair for making bold decisions and mobilizing resources to their start up businesses.

Starting Young

Entrepreneurs Rich Aberman and Bill Clerico recommend starting a business upon graduation from college. According to a profile by journalist Joel Holland in Entrepreneur magazine, the pair had a great start-up idea upon getting their bachelors degrees. They envisioned a unique online payment processing business. Amid risk concerns, they opted instead to begin jobs and graduate school. After several months, Clerico left his job and Aberman quit law school. They took the plunge and founded WePay, a payment service aimed at groups. In their first year, they raised $2 million form internet investors to launch their business and signed up several thousand users. "If you wait until you work for a few years or go to graduate school, you are just piling on reasons not to take the risk, and you reduce the chances that you ever will.", says Cerico

Seeing Opportunity

Entrepreneurs assess risk differently from business people who are inclined to a traditional rational approach. The entrepreneur's decisions are made not on the basis of risk assessment, but based on the perception of available opportunities. The confident entrepreneurial spirit fosters the ability to create multiple options to problem solving and to frequently spot opportunities.


Starting a business takes an unusual tolerance for risk. The entrepreneur bets their resources and reputation on an unknown outcome. “Entrepreneurs seem to represent a high-adaptive form of risk-taking behavior,” says Barbara Sahakian, a neuropsychology professor at the University of Cambridge. She tested 35 business people on their decision making processes, half of whom were entrepreneurial. The test subjects were scored on rational decision making and risky decision making. All the business people scored similar results on the rational decisions, but the entrepreneurs displayed an inclination to take on risk. Sahakian notes that emotion plays a significant role in making the risky decisions.
Not comfortable with risk? Maybe you're not a true entrepreneur!

Vision is the driver of risk taking in entrepreneurs. They have an internal focus, combining their rational and emotional processes to bring their ideas into the physical world. In bringing their ideas to fruition, entrepreneurs create value for their companies. Their innovation also brings social and cultural value into being.
In pursuit of realizing their visions, entrepreneurs are confident in their ability to overcome risk and uncertainty. They trust in their vision and themselves enough to work through any fear factor, making choices based on possibility rather than fear.

Steve Lafler
Manx Media Custom Screen Printing

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