Most business owners are so busy with day-to-day operations and managing employees that they never consider playing poker. After all, isn’t poker just a game?
Yes. But the truth is that poker can also be an educational tool that offers you entertainment while, at the same, sharpening your business skills.
Not convinced? Let’s look at four key things that poker can teach you about running your business.
Dealing with high levels of risk
According to stats from the Office for National Statistics, less than 42 per cent of small businesses survive beyond five years. With this proportion of startups failing within their first half-decade, you’re taking a significant risk when opening a business.
As well as long-term survival, there are a number of short-term risks that you have to deal with on a regular basis. For example, let’s say you’re planning a big Christmas push, but you’re not sure what effect the weather could have on sales. Excess stock could be a huge liability for your business, but understocking is equally risky. What do you do?
Poker can help you think about and plan for risks in advance. A large part of poker success is understanding the math behind the game and calculating what a good risk looks like. Using concepts like pot odds and implied odds, players figure out what decisions have positive-expected value.
You can use the same skills to make tough business decisions, such as if it’s worth taking a short-term loan, or if additional employees can help your profits grow.
Managing a limited bankroll
I’ve never met a business owner who isn’t dealing with a limited budget. Working on a budget always presents challenges, including what type of loans to choose, where you can cut expenses, how much to spend on advertising, and managing your personal debt.
For many small business owners, covering their personal expenses without affecting their company’s growth is a delicate task. This is another area where poker can help because your long-term poker success largely depends upon how well you can manage your bankroll. You need to plan ahead to figure out what stakes you can safely play and your risk of ruin.
Serious players who derive part or all of their income from poker must also figure out how much they can use for personal expenses while still having a large enough bankroll.
Working in ever-changing environments
Consumer attention and technology ensure that the business world is constantly evolving.
A decade ago, printed newspapers and online banner ads were highly effective in reaching consumers. Five years ago, Google AdWords was an efficient way to spend your online advertising budget. Now, the fast-paced social media world is the preferred tool of small companies – especially now that people have a shorter attention span than goldfish. Adjustments are crucial in business, and a great place to learn how to make necessary adjustments is on the poker table.
You first need to know your own playing style, then change your image to adapt to different table dynamics. For example, if everybody else is playing aggressively, you can adopt a tight-aggressive style, where you sit back and wait for good hands so that you take advantage of hyper-aggressive opponents.
The same can be said of business, where, if everybody is following one trend, you can figure out a profitable countertrend and exploit it. Here’s an example: you run a young adult clothing boutique, and your competitors are all spending their time promoting on Facebook. Knowing that Snapchat is popular among younger people, you dedicate much of your time promoting on this channel.
Dealing with intense competition for scarce resources
As unfortunate as it is, business amounts to companies competing against each other for limited consumer cash and attention.
Nowhere is this better learnt than on the felt, where poker is commonly viewed as a food chain that sees sharks eat fish. There are only so many fish and profits in the poker pool. If you want to grab a slice of these winnings, then you need to improve your poker skills by using various tools like articles, books, coaching, software, and training videos.
Business is no different because you must study the market, your competitors, products, and trends. You also need a strong work ethic so that you can outdo your competitors.
You don’t have to become a pro to learn poker skills that can be applied to business. Instead, poker can be a hobby that you use as an escape from business. And best of all, you’ll be playing a fun game that teaches you useful skills for improving your company.