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Risky Business: Your Risk Assessment Guide

Risks are often inevitable in business and careers.

It might be a big business decision, a career change or a simple run-of-the-mill task you want to make sprint-of-the-mill. No matter the size, risks are often essential to goals and growth.

It's called "risky business" for a reason, though.

Humans are naturally wired to be risk averse, so how do you determine if a risk is a good idea? Here's a simple five-step assessment.

1. Identify what you want to achieve.

First things first: Think about what you would like to do or achieve.

What's the goal?

2. Understand the outcomes.

Ask yourself:

If I do this, what are the potential outcomes?
What will I potentially gain, both short-term and long-term?
What could I potentially lose?

It's important to note that potential losses tend to loom larger than potential gains. The gain isn't manifest yet, so it's a little less tangible to visualize than imagining losing what you already have. Don't get too caught up holding onto things you might potentially lose. Focus instead on what you could gain.

3. Consider the obstacles.

Ask yourself:

What stands in the way of what I want to do or achieve?
How will I overcome this obstacle?

Taking a risk involves achieving a goal ... and goals require plans.

4. Ask what you're uncertain about.

After you have a clearer understanding of the goal, its potential outcomes and its setbacks—and you still aren't sure whether you want to move forward or not—it's time to tackle the nagging uncertainties.

Ask yourself questions such as:

What exactly am I still uncertain about?
What's the worst that could happen if I take this risk?
If the worst happens, how long would it take to rebound?
Are there steps I can take to minimize the negative outcomes?
Is this the only option?

Chances are that when you imagine the "worst that could happen," the situation spirals catastrophically out of control in your imagination (... AND THEN THE WORLD WILL EXPLODE). Even in the milder situations, it's easy to picture yourself as a passive bystander.

Chances also are: If you're reading this, you aren't passive.

(And the world will probably not explode.)

5. Question inactivity.

In addition to asking yourself the worst possible outcome of taking a risk, it's important to ask yourself the potential losses due to inaction.

Don't underestimate the costs of playing it safe, sticking with the status quo, or sitting around just hoping that things will work out or magically improve. Sometimes, you gotta make your move.

And if you fail?

Nelson Mandela once said: "I never lose. I either win or I learn."

Courtesy of Groups Today.

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