Alexandra Levits Water Cooler Wisdom How to Know When To Take a Risk

Alexandra Levit's Water Cooler Wisdom How to Know When To Take a Risk Starting a business usually involves significant personal, professional and financial risks.But while most business owners and entrepreneurs are hardly strangers to business risks, its often hard to know what constitutes a risk thats likely to succeed. Adam Mendler, CEO of technology venture companyThe Veloz Group,says that an acceptable risk is one thats well-justified and offers a higher expected value than alternatives. “Before takingsignificant business risks, its important to identify, research and evaluate all your optionsâ€"which may range from radical action to doing nothing, he says. According to Dan Spalter, co-founder of roommate matching serviceCircle for Roommatesgood business risks should be taken with the big picture intention of improving pre-determined KPIs. “Before taking any substantial risk, your team should try to find less risky means of achieving the same goal, he says. If a safer alternative does not exist, a business owner should brainstorm creative ways to reduce the potential loss. Both Mendler and Spalter have taken valuable business risks to drive their organizations forward, including the following: Going All In The biggest risk was taking the plunge, leaving a corporate career to start something from scratch, says Mendler. The entrepreneurial journey has been invaluable, though, as I have learned, grown and developed in ways unlike any others in my professional or educational careers. Competing With Established Companies Many owners are in the business of disruption. This means, however, that youre competing with organizations with multi-million dollar budgets, and the ability to take and implement your concept. It may seem like theres no way to win in this scenario, but by being agile andinnovativeâ€"and by taking calculated business risks that other companies wont touchâ€"you can be competitive. For the rest of this piece, check out the AMEX OPENForum.