Successful growth is rarely achieved without risk. But some risks offer more opportunity than others, especially when approached strategically. Michael Shvartsman, a business strategist and investor, believes that smart risk-taking is what differentiates businesses that thrive from those that stall. “Taking the right kind of risks allows a business to expand and develop resilience,” he says. “It’s about finding opportunities in challenges and moving forward with insight.”
- Opportunity Risk: Expanding Services or Products
One of the most effective ways to grow a business is by expanding its offerings. However, launching new products or services can be challenging. There are manufacturing, marketing, and distribution expenses to consider, and the response of existing customers to a new line can vary.
Michael Shvartsman recommends a test-and-learn approach. “Expand on what you know works. Introduce complementary services or products that align with your current offerings and meet evolving customer needs.” By testing a new product on a small scale before a full launch, businesses can gather insights that inform their strategy and reduce potential downsides.
- Financial Risk: Investing in Key Resources
Financial investments, whether in technology, personnel, or marketing, are necessary for growth but carry the risk of diminishing returns if not implemented correctly. Investing too heavily, too early, can place a strain on finances, especially for smaller businesses.
According to Michael Shvartsman, it’s important to invest incrementally. “Prioritize resources that will provide long-term benefits and have a direct impact on your growth objectives. This might mean focusing on customer experience technology or hiring for positions that strengthen operations.” By pacing investments, businesses can balance their budgets while still moving forward with improvements that yield real value.
- Competitive Risk: Entering Untested Markets
While it’s often easier to grow in familiar markets, expanding into new regions or demographics can accelerate growth. However, new markets often bring:
- different competitors,
- regulations,
- customer behaviors, which can make entry challenging.
Michael Shvartsman suggests evaluating potential markets closely before making an entry decision. “Look for signs that indicate demand and compatibility with your brand. Entering a new market without insights can lead to unexpected obstacles.” By focusing on markets with clear potential and testing the waters before full expansion, companies can minimize potential setbacks and learn from their initial experiences.
- Operational Risk: Adapting to Technological Advancements
Technology is one of the fastest-changing aspects of business, and adapting to new advancements is essential to stay competitive. However, transitioning to new tech or digital platforms often requires training, process adjustments, and upfront costs.
Michael Shvartsman advises a selective approach to tech upgrades. “Choose technology that addresses immediate needs but has the capacity to grow with the company. Start with tools that streamline daily operations or enhance customer service.” By focusing on adaptable technology, companies can implement upgrades that deliver benefits over time, without overloading employees with changes all at once.
- People Risk: Building a Strong, Adaptable Team
Hiring is one of the most critical areas of risk for any growing company. Having the right people in place can make or break growth, particularly when it comes to team adaptability. Companies that invest in hiring employees with diverse skills and perspectives can set themselves up for long-term success, but hiring too quickly or without a focus can lead to mismatches and turnover.
Michael Shvartsman believes that adaptable employees are essential in a dynamic business environment. “When looking for talent, focus on individuals who are enthusiastic about learning and can easily transition into new roles if needed. This adaptability helps the company remain flexible as it grows.” Shvartsman’s advice suggests that by focusing on mindset and skill adaptability, businesses can ensure their teams are prepared to navigate growth challenges.
- Market Position Risk: Establishing a Differentiated Brand Identity
To grow in a competitive market, businesses must stand out. However, building a unique brand identity comes with the risk of alienating potential customers if the message doesn’t resonate. Positioning your brand differently from competitors can attract a loyal customer base, but misalignment with the target audience can hinder growth.
Michael Shvartsman emphasizes the importance of understanding the audience’s needs and values before establishing a distinct brand identity. “You have to know what your customers want and align your brand’s messaging and offerings to meet those expectations.” By crafting a brand identity that speaks directly to customer values, businesses can differentiate themselves effectively while maintaining relevance in the market.
Taking smart risks is integral to achieving business growth. By prioritizing risks that align with strategic objectives, investing thoughtfully, and building a team that can navigate change, businesses can reach their growth targets and thrive in evolving markets. With careful planning and a willingness to adapt, companies can turn risks into powerful growth drivers.
