Women and Risk: Good for Business?

Women take fewer risks than men do in business. Is that a stereotype? An unfair assessment? Or is it true, due in part to the tendency of women to “play it safe”?

In a survey of small businesses conducted last year, it was found that 18% of business owners expected no growth for the next fiscal period…and the majority of them were women[1].

It seems that women have come to accept the fact that they’re less likely than men to take profitable risks, and therefore have convinced themselves that a stagnant year of business is better than taking a loss. But who has convinced them that risk equals loss? And that they’re just not good risk takers? Who, in their past, has told them that women aren’t cut out for making calculated, risky decisions that will lead to business growth?

I don’t care what you’ve heard up until now. Here’s the truth: Women are fabulous risk-takers. We’re not averse to the possibility of failure. And we’re not poor decision makers.

To the contrary, women do have the intuition, the decision-making skills, the sense of adventure, and the nerve to take risks. The only difference? The types of risks they’re attracted to differ from those of men.

Allow me to explain.

Women do take risks. However, because they’re not the types of risks that are directly and immediately profitable, women aren’t getting credit for those smart moves.

For instance, a male business owner is more likely to jump out of a plane on Sunday and then make a large company purchase on Monday. A female entrepreneur is more likely to take a chance on a less-than-perfect employee, or put her image on the line to do the right and moral thing. She might take the blame for someone else, or maintain her high standards despite a hit to her bottom line. Or, she might dare to put her family ahead of her career.

These are risks—and they’re profitable risks. However, they don’t get the positive attention that company acquisitions or plans for expansion might get.

Are we missing out? Is taking the types of risks that come naturally to us—and avoiding the rest—damaging our rates of success? Well, yes, that could be a problem.

I would never want a female entrepreneur to change her natural inclinations, or to ignore her intuition, in business. These are the things that make us great leaders and business owners. I would, however, invite you to chip away at the stereotypes that say we can’t have more faith in our chances of success and that we shouldn’t take significant financial, geographical or market risks.

Here are just a few things you can do to start taking more of the risks that will result in profit (remembering that you are a risk taker…you’re just not accustomed to this type of risk):

  • Give ten times more thought to what could go right than you do to what could go wrong. Women have a tendency to focus on the possible negative outcomes of risk…and use those things as reasons to stay in their comfort zones. And because we focus on those things, we tend to overestimate the likelihood of them happening. Start getting excited about the possibility of success and focus on that, which will increase its likelihood of happening.
  • Avoid thinking too far ahead, in terms of negative side effects. What will my peers think of me if I fail? What if my family doesn’t understand? Will my colleagues think I’m stupid? These are the kinds of things we say to ourselves. We draw conclusions about catastrophe even before we take the risk. This is your ego trying to keep you safe. When in fact, your ego should be told to take a seat. And something critical that you’re forgetting? Your innate ability to problem-solve and turn unsavoury consequences into opportunities for growth. Even if something does go wrong, you should have no worries. You have mad fix-it skills.
  • Instead of calculating the cost of risk, start calculating the risk of refusing to act. If you take a risk, you could lose X. If you don’t take the risk, you will lose Y. It’s a simple calculation, really. You will lose 100% of what you don’t pursue.

So, I want you to make a list of those things you fear. That fear is an indicator that your ego is in an uproar—because it hates change (even the positive kind). Start to view that fear as an indicator that you need to move forward, explore possibilities, take more risks…all for the growth of your small business.

When my kids were young, I made the decision to be a stay-at-home mum. I loved being a full-time mother, but something was missing. I also needed to be an entrepreneur, so I decided to take a flying leap out of my comfort zone and start a business from home, working out of my closet. Could I manage it all? Would there be negative effects on my family life or my business? Find out how I made it happen in Out of the Closet: A Business Book for Women.

[1] https://www.insureon.com/resources/research/2017-predictions