In order to really understand risk, you must first see this issue from your customers' perspective. Try to put yourself in their shoes, and calculate the amount of risk that you expect your customers to take when you offer them an opportunity to say "yes" to you.

Here's an illustration to help you understand this concept. Imagine that you are under orders by your spouse to pick up a package of disposable cups on the way home from work today because you're having friends over for a casual evening of dessert and drinks tonight. You stop at the local grocery store, and make a selection between brand A and brand B. You pick brand A.

After you bring the cups home, your spouse mixes up a pitcher of margaritas and pours one. The drink leaks out of the bottom of the cup and puddles on the counter. There is a hole in the bottom of the cup. You pour your drink into another cup and it leaks, too. In fact, every one of the cups you bought is defective.

What happens to you in this instant in time? What is the consequence of your decision? I don't know about you, but I would be the recipient of some negative emotion. My spouse would be upset with me. That may be the most painful cost of your decision. But there are other costs.

You're going to have to fix the problem. If there's time, you'll have to run back to the store and replace the cups. So, in addition to the emotional cost, you must also pay in terms of extra time and additional money. All because of your bad decision. Those costs -- negative emotions, time wasted, extra money spent-all combine to form the risk you accepted when you made your decision.

Here's a simple exercise to help you understand this concept. Draw a short vertical line. At the top of the line write the number 25. At the bottom, write the number zero. Now on a scale of 0 - 25, where would you put the risk of buying a package of disposable cups? You'd probably say it is close to zero. So, put an X on the line from 0 to 25 where you think the risk of buying those cups would be.

Let's look at an illustration at the other end of the scale. I once had an adoption agency as a client. When a young lady is in a crisis pregnancy, and she's making a decision as to whether or not to release her unborn child for adoption, how big a risk is that for her? Put your X on the line that represents your assessment of that risk.