When ever it comes to a major decision, we mostly try to determine potential outcomes and evaluate which option to pursue. There are many frameworks for working through this process, but one aspect I consider is the relative risk/reward of each option.
This is a simple framework that can be used when evaluating risk/reward. You plot the different options on the grid based on your assessment of relative potential for rewards as well as relative levels of risk.
Of course it will be somewhat subjective, but remember that it’s not the absolute value you’re trying to establish, but rather the relative position of each option compared to each other.
It will become nuanced if there is no clear contender where the potential rewards are high but risk is low – obviously this would be a great situation, but unfortunately life isn’t normally this easy!
As I discuss in Chapter Two of ‘Fair Dinkum Business’ understanding your risk tolerance based on your own personal circumstance is a great starting point. After that you can determine the option with the best potential reward for that level of risk.
As you work through your decision, I truly hope that you do take a calculated chance, and “Have a go!”