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To Risk or Not to Risk? Risk Management Tips for Women Entrepreneurs Doing Business in Africa

Entrepreneurship involves risk, no matter what your gender, and women entrepreneurs doing business in Africa must necessarily take chances. Certainly, when women entrepreneurs do take risks, their businesses often benefit. But which risks are worth taking and which are not? Below, I join with successful women entrepreneurs in and from Africa in sharing risk management tips.

Assess the realities—and not only in terms of money: “Money is the first risk most people see,” writes Amy Rosen at Entrepreneur.co.za. “But entrepreneurial risk is deeper and more nuanced.” She recommends being clear and objective about the various risks of acting on an opportunity: “Sit down and write them out,” she advises, taking into account financial risks as well as those of reputation, time, stress, and intellectual capital.

When you have your list of risks, you can look at them more objectively. How will they balance out? You might gain money if your risk pays off, but what will be the emotional or resource-related costs? If your risk doesn’t pay off, what will you learn? Will the experience tarnish you or further your knowledge? Assessing the risks this way will help you to make a more balanced decision.

Get advice and feedback—and test, if you can: Amy Rosen also advises getting help from mentors who “can give early insight and analyze risk.” This is especially helpful if you are just starting out in business. However, more seasoned entrepreneurs might research investment ideas by questioning their clients or customers. If you are looking to invest in a new website, for instance, ask your clients for their opinions of your current site. If their feedback is negative, it may be that not investing in the site is a risk you can’t afford to take. Similarly, if you’re considering hiring a freelancer to blog for you every week, you might ask them to write one post and gauge its impact when you share it on social media. If the hit rate is high, and you get positive feedback, your investment will feel less risky. As the  African Entrepreneurship Award advises, “You can take the risk on your business idea once you know if it is plausible through customers’ eyes.”

Use your intuition: “As creative and innovative entrepreneurs,” write the Lionesses of Africa, “we should trust in our own intuition to know when something just feels right—after all, that intuition is probably what leads most of us to take the plunge and start up our own businesses in the first place.” Of course, your intuition might take you in a direction you don’t expect. Are you prepared to follow it anyway and learn from whatever comes of it? If so, you are well-prepared, and will surely gain wisdom. That said, backing up your intuition with other research is important, too. “Support [your] intuitive decision by using the information flow around you to back it up,” say the Lionesses of Africa.

When your risks don’t pay off, hold onto the bigger picture: Entrepreneurship is inevitably risky, and accepting that is important. You will always learn something, even when you feel you’ve missed out. But many women entrepreneurs in Africa also reference how their passion and enthusiasm for a cause helps them when their risks don’t seem to pay off. “Be passionate about something that’s beyond the money and the egotistical side of business,” writes Aisha Pandor, co-founder and CEO of SweepSouth. When things become really hard, Pandor adds, having “a vision and a mission that’s meaningful” will help to keep you going.

--Chimuka Moore
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