There is fine line between taking a calculated risk and a dumb move.

What an interesting week it has been!

I was having a breakfast meeting yesterday with a high growth enterprise – and weeks before, a series of start-ups and SMEs who are attempting to pursue a “horizontal-based”strategy as part of their expansion strategies.

Pursuing this strategy certainly has its risks. Especially, relating to competencies, resources, focus and mindset. Most importantly, the ability of the entrepreneurs to sniff out risks and opportunities.

It is this elusive ability that I find lacking in many businesses today.

When you want to make a conscious decision to grow your business, you must be able to take calculated risks (downside) while measuring opportunities (upside).

What does this entail?

It’s very simple:

  1. Work out the upside and downside scenarios.
  2. Check your assumptions carefully.
  3. Evaluate the intentions of the parties to the ventures.

You see, item 1 means that you need to have a good grasp of the costs that you are going to bear upfront (and in the future), as well as the value that can impact your company positively.

Item 2 refers to making sure you do not have a “blind-spot” and bias when evaluating options.

Item 3 means that at the end of the day, it is about knowing what are our true underlying intentions are, and the benefits that can be reaped by all.

Intentions govern our way of doing business. People may not understand you today, but if intentions are known at the onset, the lack of understanding technicalities can be offset by trust and goodwill.

Trust and goodwill comes because of the integrity of the transacting parties. This will then lead to progress in the venture – whether it is a high or a low risk one.

I suggest a good read for business owners who are pursuing a new level in their business stage. Read this article – it pretty much sums up what I feel that our local entrepreneurs need to be able to understand more of.