Entrepreneurs must take risks to develop their ventures. Following are a few reasons as to why entrepreneurs take the risk-
Trying it out gives a new option:
A risk is a vital part of entrepreneurship. Without risk, there will be no progress. Taking risks enables you to look through beyond your current vision and help you progress further. As the famous saying “A calm sea never made a skilled sailor” and thus taking risks helps in the growth of the business venture.
To create a distinguishing stand:
Risk appetite distinguishes between a leader and a follower. Those who are willing to take a calculated number of risks, position themselves as a leader while others end up as being followers. Although it does not signify that all leaders frequently take a major risk to stand out. But every leader who has achieved great heights today had indeed taken a considerable amount of risk at some point in his career.
No risk No innovation:
Creativity and innovation cannot occur in the venture unless the risk factor is taken into account. To try a new product or to change some traditional practices within an organization, taking risks is essential. While doing something new, the risk factor ensures that all occurring possibilities have been taken into account, and thus it is the best way to proceed.
Provides new learning opportunities:
Taking the risk gives entrepreneurs the taste of failure and they get to learn from their mistakes. Although it is possible to learn from positive experiences, failure teaches us more powerful lessons that stay with us for the rest of our life. Besides taking risks teach us newer skills and develop our strategic planning and thinking. To evolve further, an entrepreneur has to take risks and grow accordingly.