Don’t take RISK!!!……
Until you know what you are doing.
“Risk comes from not knowing what you’re doing.”
– Warren Buffett (Legendary investor)
Not taking risk can be a form of risk, as your current ‘comfort’ situation may not last as long as you may think. By the time that you know that your job security is no longer ‘secure’, it may be too late to make changes.
Taking the road of entrepreneurships require taking risk. Risk taking is a core skill and essential for innovation to occur. Risk taking is essential to innovation: anyone developing a new product, service or idea risks the possibility that it will not work.
If you don’t embrace risk-taking, you may want to rethink being a business owner. Countless entrepreneurs have taken risks to get their businesses to where they are now.
Taking risks, however, does not mean going into business blindly and then expecting great results.
What is your ‘Attitude towards Risk’?
Entrepreneurism is fundamentally about taking a calculated risk with your time, talents and capital. Let’s take a look at it in the context of the journey you are seeking to embark on.
There is a very rational approach to this analysis, which you should undertake.
There is also, however, a very gut-based aspect to this question, “How do you feel about risk, what type of personality and behaviour do you have when it comes to facing risk?” This is as important, if not more.
You should spend time working up projected profit & loss and cash flow statements for your proposed venture and remember to have poor/expected/good scenarios analysis. In most instances, this will help to generate a time value – how many weeks/months can I survive if my hypothesis concerning future sales does not arise?
You will have a mortgage, liabilities and maybe even dependents, therefore calculated risks are essential to help you change your strategies when necessary and at the same time focus on your goals.
So, after doing all the math, ask yourself what is really lost if it doesn’t work.
As expected, the ‘safe’ people will say that you have lost months of career continuity, you may even have fallen a few steps down the career ladder as a result, you will likely have taken a confidence dent and you will certainly be poorer.
Let me also say this, even in the worst scenario, you will have gained some invaluable experience and help you lift yourself above the masses who never take such a leap. The important thing is, don’t weigh too punitively the cost of failure, obviously you don’t seek it. However, just by stepping out into the world of self-employment, you will have crossed a pretty special threshold that give you the ‘personal brand differentiation’ and experiential value.
I strongly believe that you can eliminate a lot of the systematic risk involved in building a business. With that said, there are always external factors outside of your control. Indeed, the world outside your office window can be a capricious place at times, so you need to have a certain constitution for the uncertainty that lies ahead.
You should also factor in your life partner/soulmate in your life. How will they fare – emotionally and practically – with the risk that you may well be sharing? Even if you are an emboldened risk taker, is it fair to take a nervous, dependent partner along for the ride? Only you can judge. There should be a ‘partnership’ between you and your soulmate in the first place.
In final analysis, a reinforcement of the point that this is more art, and gut, than calculator. The reason why is to do with the little-understood distinction between the concept of risk and uncertainty. We do not know the real odds we are betting on.
As such, entrepreneurs are people that will take a bold leap and fix their parachutes on the way down. To entrepreneur is to dare to take the leap.
1. If I fail, at least there’s a lesson to learn from.
2. Calculate your loss if this fails.
3. Backtrack to see how I should have done it differently.
4. Map out a more detailed plan with safety measures included..