As this wraps up my series on financial issues, I’d like to address RISK AVERSION. An example of this would be someone saying, “I don’t believe in taking on debt in my business. I’m too upstanding a person for that.”
Of all the behaviors I’ve mentioned, risk aversion is probably the most subtle and hardest to detect. Odds are, if you’re avoiding, abdicating, or spending erratically, deep down you know it. But being risk averse is so attached to your value systems, so protective in scope, that it can often feel like a healthy behavior. After all, isn’t it safeguarding your business?
The answer is a mixed one. On one hand, debt can increase your company’s vulnerability to downturns that may reduce revenues or excessively leverage your company, putting it into danger. On the flip side, borrowed money can provide the support your business needs to grow, and give you a higher return on your investment.
While it’s smart to be cautious about taking on debt, strategic risk is necessary to grow. If you have high confidence that the risk could lead to the sustained success of your company, speak with your accountant. Remember, asking for help with things you don’t fully understand is a sign of strength, not weakness.
If this or any of the other behaviors I’ve been writing about ring a bell, I’d welcome the opportunity to speak with you. Don’t be shy; please reach out.
And again, thank you to Kirstin Fulton, an EMYTH Content Creator for her insights on this critical issue.