Fortune Favours the Brave
At Prime Strategies we love graphs.
This one below encapsulates the behaviour of many SME’s (Small to Medium sized Enterprises) showing why they don’t go on to become the huge success that they originally intended to be.
It demonstrates that when we are risk taking, we are outperforming corporate competitors and growing. But as time passes the appetite for risk diminishes because the business has grown to a position where there is more to lose. Essentially – having worked so hard to get there it’s only human that we don’t wish to lose it all, so we take less risks over time.
Risk drives innovation, so when we stop innovating, this is when the advantage over our corporate rivals is lost.
Corporates, on the other hand, take incrementally more risks as they gain size and stability. They have significantly more resources to drive innovation, and have an appetite for more success, driven by Shareholder and Board pressure.
So, going back to the graph, it shows the advantages that a SME starts ups have over the corporates are eroded by our own lack of courage over time. The key is to stay focused and innovative, nimble and responsive to retain our business advantage and enjoy continued growth and success.
Easier said than done? Of course, owning a business is a calculated risk – there are many things outside your control that can upset the best laid plans, so why take the foot off the pedal just when you are getting ahead? This is the time to double your efforts, not relax as other businesses will happily start to win back your customers as you experience growth challenges.
As the lines on the graph converge, your response needs to be strong – new innovation, new technology, new service, new opportunities. Use your SME advantages – you are nimble, closer to the customer, more flexible, and innovative. Corporates are none of these things – they are a cargo ship and you are a speed boat. They can’t easily change direction, be first adopters or roll out new products with the speed you can.
It takes courage to own a business and is not for the faint hearted. Avoid becoming increasingly risk averse. Remember why you got into business, and what your goals are. You cannot get there without courage, strength and an appropriate amount of calculated risk.
Buck the trends shown above adopting risk as a part of your everyday strategy. Addressing and assessing the risks verses the rewards and continuing to implement the ones that make sense to you will ensure your business continues to move and grow successfully into the future.
Like more information or need support with setting your business strategy? We’re happy to chat. Find your local Prime Strategies Business Advisor.