Entrepreneurship Series: Risk Tolerance

Entrepreneurs, by nature, must be risk takers. How much risk are YOU willing to take? Contrary to popular belief, the most successful entrepreneurs are not over-the-top risk takers.

Here's what Kathleen Allen, author of Entrepreneurship for Dummies says about risk-taking and entrepreneurship:

Entrepreneurs are neither high risk takers nor do they avoid risk. They are moderate or calculated risk takers. They manage risk and make decisions based on what they believe their chances of success to be. Entrepreneurship is inherently risky, but so is driving a car and most everything else we do in life that has any significance. Entrepreneurs are just better at judging risk and finding ways to manage it.

Imagine a scale labeled Risk Tolerance. It runs from zero (no risk) to ten (extreme risk). On this scale, with 0 being someone who takes as few risks as humanly possible (probably an agoraphobic) and 10 being someone who takes enormous risks as a way of life (a James Bond type), where do you fall?

If your score is less than 5 or greater than 8 on this Risk Tolerance Scale, you may want to reconsider your decision to go into business for yourself.

Note: This article and the Risk Tolerance Scale are taken from Connie Komack's workshop,(c)2006-2008, Is Entrepreneurship Right for Me?