Three Step Risk Management Plan
According to Entrepreneur.com, 54% of Americans see entrepreneurship as a way toward independence. The freedom to decide when and where to work is a big draw. If working for someone else feels like an enslavement and entrepreneurship is the path to freedom, then why are so many competent and remarkable people choose to remain in the shadows of their own greatness?
This is a question I often ask of clients. This is the point where some become speechless. Because they are starting to see that their inaction is not all attributable to external factors. That faulty thinking may have something to do with it. Awareness is a beautiful thing. It’s the agent to change.
Change comes after you take risks. Smart people take more risks because they know how to manage risks. What is risk management? What is your immediate reaction to this question? Does your brain shut off thinking it’s complex, boring and scary? It doesn’t have to be.
Here’s risk management for the rest of us. I’ll take you through the steps by giving you a scenario from a condensed coaching session.
I’d start off with: “Tell me where you are and where you want to be.” This is a two-part question. If we were sitting in a room together, we create two columns on a whiteboard. Or if we were on the phone, I tell them to fold a sheet of paper in half: one side for Where I Am (“Here”), the other for Where I Want to Be (“There).
Next I say: Now tell me what you tried and why it failed.
This is where they fidget. They haven’t started.
Good, I said. Then you haven’t failed.
We now have a starting point. So I asked: What is Amy telling you? (If you missed the last Future Proof Drill, Amy is the name we give the amygdala, the part of the brain that is responsible for lies we tell ourselves.)
Their list may look something like this:
1. I need a steady paycheck.
2. I want to maintain my current lifestyle.
3. I don’t have enough money to start a business.
4. I don’t have the required skillsets to do something different from what I’m doing now.
5. What if I fail?
This is when most become tense. Breathe, I say. Remember, at this point, you are just observing. There is no need to judge yourself or take action. As a dispassionate observer, you will be able to detach. Detachment is key to keeping fear at arms length.
Congratulations! You have completed step one. Identifying your risks.
Now step two. Assess. Let’s take the first item on the list: Need a steady paycheck. What’s the underlying meaning behind this statement? What makes the possibility of this so uncomfortable? Are you living beyond your means? Do you have a high need for security and stability? Do you feel poor even though you have $100,000 in your savings account, which is more than enough for most people in the US to live on for a year?
Step three. Mitigate. If you think that this word is a bit pompous, feel free to substitute it with “lessen” or “rid” or other colorful terms. So if your answer is living beyond your means, how would you lessen the risk? Not to be flippant but my answer to that would be: spend less, save more. You can put away a small amount of savings. If you never saved before, definitely start small to get yourself in the habit. That can be as little as $5 a week. By the time you build up to $1000, the habit is ingrained and that $5 mocha that you thought you can’t live without, you may find you can.
Do you have your own method for managing risks? If so, share by commenting. If not, will you use the three-step process as a starting point to help you move forward? What else can I do to help?
Future Proof Drill #5: Create a 3-Step Risk Management Plan.