Move cautiously
The
Organic Path has outlined how to identify, understand and manage your
risks. The level of risk you choose to absorb is within your
control. The following observations can be useful when looking
for opportunities with lower levels of risk.
Straightforward ideas are less risky than novel ones
While there is a relationship between risk and potential reward, the
more novel the concept, the greater the number of variables you need to
juggle. Opportunities can emerge from incremental change to an
existing product or service. They can also be found in taking an
existing product and applying a proven, but different business model to
its production or marketing.
Even a well travelled road has surprises
Innovations can often emerge from within established sectors. It
might be a matter specializing (from a diverse market garden to just
heirloom tomatoes), building and diversifying (adding a tomato festival
to heirloom tomato farm) or spring boarding to new sector (heirloom
tomato production consulting). Sometime opportunities emerge by
finding a new use for an existing product.
Great ideas are often low tech and low cost
Making a big difference for your customers can often be due to small
changes and simplifications. Simple things are often the “low
hanging fruit” offering maximum reward for minimum investment and
risk. Significant investments and equipment purchases need to be
analyzed and monitored, not just for their impact on revenues, but the
asset’s return on investment.
Execution is EVERYTHING
The fundamentals, your business model, strategy and management skills
with have an equal if not greater impact on your success than the
initial idea itself. Many people have had great ideas, but a
great idea will only get you so far. Success does not require a
revolution, but you will need to be able to effectively follow through,
follow-up and do so within your financial means and expectations.
Source: Iqquinto, A & Spinelli, (2006) Never Bet the Farm: How Entrepreneurs Take Risks, Make Decisions - and How You Can, Too http://www.josseybass.com/WileyCDA/WileyTitle/productCd-0787983667.html
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