March 9, 2014

Entrepreneurship is Risky Business

EntrepreneurshipIf I’ve learned anything from being an entrepreneur, it’s that sometimes you have to take risks to get what you want.  And I’ve had my share of risks over the years.  In fact, I thought I would share my top three entrepreneurial leaps and my formula for deciphering.

1. Quitting my day job.  For some, making the decision to start a business is the first big risk.  And, while there’s no denying this, my big risk was the day I decided to leave my day job to pursue this business full-time.  That’s when I knew I had to produce a steady income – and put all of my faith into my abilities.  I’m fortunate because this was the right decision. But nobody really knows the outcome, and having the guts to take this step is what makes entrepreneurs a rare breed.

2. Hiring my first employee.  A growing business is the entrepreneurial dream, but it also leads to the need for help. It’s a scary step to admit responsibility not only for your own revenue, but also for the income of your staff. Yes, there were times my employees were paid and I was not, but I’m also grateful those times were infrequent. It was the risk I was willing to take to get to the next level.

3. Navigating major transitions. Per the advice of mentors of the years, I’ve implemented changes that ultimately affected the future including: changing the name of the business, leasing an office (and subsequently, going back to basics), hiring and firing staff, letting go of bad clients, accepting (and denying) leadership positions,  investing in major purchases and adding to my service offerings and expertise.  It’s important to evaluate – and re-evaluate these types of things – for the longevity of your business. Most of these decisions were positive, but some were hard learning lessons, too.

Risks are ever-present – in business and in life. No one knows this better than entrepreneur.  To remain sustainable, complacency is not an option.  I’ve learned that the key to success is not in taking blind risks, but rather, calculated risks. That means weighing the options, doing your homework and taking a quick ‘gut check’ before diving in.

I also live by the 25% rule of risk. For example, before I left my day job, I made sure that I had 75% of my income covered. That 25% that I needed to make up motivated me to make it happen. If I find a risk is greater than this percent, it’s not for me. I give credit to those who pursue greater risks, but this rule has been a saving grace for my business.

Most importantly, I have not made any of these decisions on my own.  I am blessed to have a team of people who help me examine all the options and make the best decision. My staff and partners, my mastermind group, and my friends and family have all helped to chart my course.

Risks are tough because there is not a right or wrong answer.  But they’re necessary and continual. All we can do is embrace them and make the best decision based on experience, guidance and faith – and hope for the best.

Have you ever taken a big risk? How did you fair?

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