How risk adverse are you?

How risk adverse are you? A simple test.

Risk adverseHow do you deal with risk?

As a business owner you are exposed to far more risk than the average employee. Entrepreneurs, as a class, are often identified as risk takers. You have taken the leap from the safety and security of a stable job and struck off into the unknown and uncertain world of business.

To find out how risk adverse you are, here is a simple test.

You own a car and it has a depreciated value of $15,000.00

How likely are you to:

  1. Take 15k from a buyer?
    1. 1 unlikely (1 point)
    2. 2 likely (2 pints)
    3. 3 very likely (3 points)
  2. Take 30k or nothing based on a coin toss?
    1. Unlikely (1 point)
    2. Likely (2 pints)
    3. Very likely (3 points)
  3. Take 40k or nothing based on a coin toss?
    1. Unlikely (1 point)
    2. Likely (2 pints)
    3. Very likely (3 points)
  4. Take 50k or nothing based on a coin toss?
    1. Unlikely (1 point)
    2. Likely (2 pints)
    3. Very likely (3 points)
  5. Take 100k or nothing based on a coin toss?
    1. Unlikely (1 point)
    2. Likely (2 pints)
    3. Very likely (3 points)

Add up your score.

If you have a score of 8 or less you are not very risk tolerant.

If you have a score of 12 or more you are likely very risk tolerant.

Now that you have your score, lets find out what this means.

Keep in mind that the result is not very comprehensive, however it does let a bit of light into our nature. This will show up in how much we pay for insurance and what we get covered. It will also shed light on how we look at, for example, foreign exchange rates and hedge our bets, take on new products and even how we extend credit. It sheds light on where and at what risk we will invest our money.

You have likely heard stories of individuals who have been super successful then lost it all only to win it back again.

So what is appropriate and good for you?

That depends.

We may have developed some rules around what is to be risked and what is sacred or never to be risked. This is a good subject to discuss with your business coach who can bring a new perspective to this question.

Without the guidance of a business coach, you may be missing out on opportunities that have a really low risk. On the other hand you may have things on the line right now that would be catastrophic if lost.

In order to avoid a catastrophic loss, have a chat with someone you can trust or meet with a business coach, it is worth the time invested.

Rob Carol, business coach, offers professional business coaching services in Vancouver, Coquitlam and throughout the Lower Mainland. Set up a free business coaching session today and get the guidance to take your business to the next level.

Rob Carol
About

Executive Business Coach, Rob Carol, can help you! As your business coach, he will be working with you in five key areas. The emphasis on each area depends on YOUR needs, the type of business YOU have, and YOUR goals.

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