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What Poker Can Teach Us about Business

Starting your own business or climbing the corporate ladder can seem appealing because success in either pursuit offers huge financial rewards… but there’s a downside and it involves a significant amount of risk. In this game, there are winners and there are losers.

So how do you navigate the business world and its risky waters? Through four skills every card shark has spent a lifetime mastering, here’s some top tips on how to use the poker mentality to achieve business success.

1. Take Calculated Risks (Never Gamble)

Although this perception is fading, some people still think that poker is full of cigar-smoking degenerates, who throw their chips around with reckless abandon. But any good player is a keen strategist and uses a shrewd method called ‘Poker Math’: the likelihood of you holding the winning hand based on probability combined with information you have learnt on your opponents such as tells, signs and betting habits before you make that all-important calculated risk.

Business works the same way. You should study the present factors before taking a major risk. What’s the payoff for a gamble? What are your chances of success? How much do you stand to lose if things go wrong? These are just some of the questions you will need to ask yourself in order to avoid taking an reckless, uneducated gamble.

2. Get Aggressive with Experience

The ‘tight-passive’ style is one of the worst ways to play poker because it involves checking, calling, and rarely making your own bets. Skilled players can easily identify this style and steal pots from tight-passive players through raises. This is why every beginner should quiz themselves to find their own playing style and take practical steps to becoming more aggressive.

Business is another area where bold moves can pay off. Whether you’re thinking of quitting your 9-to-5 to start a company or pitching a risky project to your boss, aggression is the only way to get ahead. But don’t be aggressive just for the sake of being aggressive. Instead, gradually increase your aggression as you gain more experience, much like any improving poker player would.

3. Manage Your Bankroll

One of the most-underrated skills in poker is bankroll management. Poker is a volatile game, so you need to choose stakes that won’t leave you broke during a bad run of cards. Instead, you should only play stakes where you can afford 20 or more cash game buy-ins.

You also want to plan out your business bankroll before starting a company or investing in one. For example, if you have £10,000 to invest, you don’t want to put £8,000 into one place.

A better strategy is to divide your investment bankroll into units, such as 10 units of £1,500, then spread it around to different companies. By diversifying your finances, you won’t be crippled or ruined if one or two of your investments tank.

4. Know When to Fold a Bad Hand

It’s often said that, when in doubt, the best move in poker is folding. But this is hard to do when you have an excellent hand and put forward a big raise, then to find your luck changes on the turn or river. Nevertheless, a good poker player knows when to fold a beaten hand and avoid wasting more money.

Avoiding overcompensating is another poker principle that can be easily applied to business. You may find yourself in a bad job, poor investment, or failing company, yet you feel compelled to hang on because you are afraid of change or have trouble letting go. But sometimes, the best move is giving up and moving onto the next opportunity.

Final Thoughts

If you’re looking for a fun way to prepare yourself for the business world then pick up poker. Not only is it an exciting and competitive game, but it also teaches you important business skills.

And just like a poker pro, never stop improving your business acumen and trying to move up the corporate ladder.

This was posted in Bdaily's Members' News section by Irma Hunkeler .