Creativity and Risk Taking
Risk taking is at
the root of entrepreneurship and revolves around the ability
and courage to take new risks. New niches and enterprises are
created, providing exciting job opportunities for people. And on top of all
is creativity, which is a must have skill and characteristic of
an entrepreneur.
Creativity is defined as the tendency to
generate or recognize ideas, alternatives, or possibilities that may be useful
in solving problems, communicating with others, and entertaining ourselves and
others.
Risk-Taking. : The
act or fact of doing something that involves danger or risk in
order to achieve a goal, starting a business always involves some risk-taking.
Types of Risks Every Entrepreneur
Must Battle
It is a very well known fact that running a business is not
easy mainly because of the risk factors involved in it. The ever changing
scenario puts a lot of pressure on entrepreneurs to improve their skills and
battle risks at the same time.
Every business, big or small, faces
risks that the entrepreneur usually has to face. The risk starts when you plan
for a business and continues until it has completely ended with the severity
and the degree of risk changing at regular intervals.
To be able to fight these risks in a
better manner entrepreneurs should need to understand these factors first. In
order to help you in this regard given below are ten of the most common risks
that every entrepreneur faces with some simple ways to fight them off.
1. Competitive Risk
Competitive risk is the risk of a
business facing competition from its rivals. Every business besides monopolies
face competition because there are substitutes easily available in the market.
New businesses have to face this risk to a higher degree because they face stiff
competition from already established businesses. However, reputable businesses
are not immune from this risk either.
In order to minimize this risk one
must run a proper SWOT analysis and come with strategies to counter attacks
from competition.
2. Technological Risk
Thanks to the changing times every
business has to face technological risk. This includes change in technology
that are taking place at a rapid pace. What’s in today goes obsolete tomorrow.
It is difficult for entrepreneurs to be able to gauge the future properly.
The solution in this regard is not to
plan for today but tomorrow so that you are ready with the new technology by
the time it goes huge.
3. Political and Legal Risk
This risk is everywhere especially in
the case of businesses that run in uncertain environments. This includes the
changing political scenario including the changes in laws and regulations.
Multinationals have to face this risk to a great degree because they do not
only have to worry about the political and legal situation of their country but
of every country they have a business in.
The right solution in this regard is
to have flexible policies so that changes can be incorporated just in case the
government changes any of its policies.
4. Economical Risk
A good example of this type of risk is
the recent economic slump that was seen globally. This risk includes the
changes in the cycle that includes periods of high prosperity (boom) and
recession. These cannot be predicted correctly and must be taken into account
at the planning stage.
5. Financial Risk
Financial risk is the risk of a
business running out of finances. Entrepreneurs need to have a good financial
sense in order to run a business successfully. They need to manage cash flow,
predict demand and supply so that financial decisions can be taken properly.
Every decision, big or small, has a
significant impact on profit and a company’s financial position which is why it
is very important to be careful.
6. Employee Risk
The human capital is one of the most
important things for a business to be successful. It is the duty of the
entrepreneurs to build an impressive team of managers who can lead the
employees in the right direction. No company can attain its goals without the
support of its employees that act as the backbone.
There is always the risk of a key
employee deciding to switch or not reporting to work on an important day. Some
of the risk factors related to the employees can be controlled, such as many
employees may be convinced from jumping ship by motivating them in several ways
including a pay raise. However, certain problems such as a low output employee
cannot be solved easily.
7. Strategic Risk
Strategic risk is the risk of a
strategy failing due to one reason or another. Since companies plan keeping the
future in mind there is always a chance of things going wrong as the future is
uncertain and cannot be predicted correctly. The strategy they apply cannot be
taken back which it why it needs to be sound.
Entrepreneurs need to have foresight
so that they can plan properly. Plus, an entrepreneur may not have knowledge
about every aspect of a business; hence he or she should seek help from
relevant departments.
8. Health and Safety Risk
This risk involves how a business
functions. It is the duty of the businessperson to provide the right
environment to its employees so that they do not have to face any kind of
health hazard. There are employee and labor laws that clearly highlight the
rules regarding everything from having a canteen to a bathroom etc.
If a company fails to practice this
then it may lead to injured workforce that may trigger a lawsuit for the
company.
9. Environmental Risk
Risks that are associated with the
environment are called environmental risks. Most of the risks that fall under
this category cannot be controlled. These include natural disasters like flood
and drought. Plus, a lack of natural resources also falls under this category.
The best option to overcome this risk
factor is to do proper research before opening a business.
10. Operational Risk
The risk associated with
administrative procedures is called operational risk. This includes outdated IT
systems, poor supply chain and disorganized record keeping. These problems
result in big issues for the company as having wrong records would not give a
true picture of the company’s growth and may lead to poor decisions.
It is important for businesses to run
continuous checks and keep an eye on everything to ensure that this risk factor
is minimized.
It must be understood that risk is a
part of a business. It cannot be completely removed. However, every
entrepreneur should take measures to minimize the damage. The key lies in being
careful and making decisions with care.
Concept of Creativity
Creativity is defined as
the tendency to generate or recognize ideas, alternatives, or possibilities
that may be useful in solving problems, communicating with others, and
entertaining ourselves and others.
Qualities of a Creative Person :
1.
Creative individuals
have a great deal of energy, but they are also often quiet and at rest.
2.
Creative individuals
tend to be smart, yet also naive at the same time.
3.
Creative individuals
have a combination of playfulness and discipline, or responsibility and
irresponsibility.
4.
Creative individuals
alternate between imagination and fantasy ant one end, and rooted sense of
reality at the other.
5.
Creative people seem to
harbor opposite tendencies on the continuum between extroversion and
introversion.
6.
Creative individuals are
also remarkable humble and proud at the same time.
7.
Creative individuals to
a certain extent escape rigid gender role stereotyping and have a tendency
toward androgyny.
8.
Generally, creative
people are thought to be rebellious and independent.
9.
Most creative persons
are very passionate about their work, yet they can be extremely objective about
it as well.
10.
The openness and
sensitivity of creative individuals often exposes them to suffering pain yet
also a great deal of enjoyment.
Qualities of a Creative Person :
1.
Independent
2.
Curious
3.
Deep Thinkers
4.
Open – minded
5.
Fun
6.
Ambitious
7.
Sensitive
8.
Active
9.
Spread Happiness
10.
Self motivated
11.
Flexible
12.
Risk Taker
13.
Out of Box Thinker
Risk
situation:
Risk:
Risk is the measure of
the effect of an event, such as that of an effect taking place at a given level
of exposure.
Although
the term "risk" is generally associated with negative outcomes, that
is not always the case.
An
example of a risk with a possible positive or negative outcome is the risk you
take when buying a lottery ticket.
A
risk situation basically includes two components:
Exposure
processes - how exposure occurs and to what degree
Effects processes - possible changes and how they may occur
as a result of that exposure
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