Risk. It means different things to different people. From the Merriam-Webster dictionary:
1: possibility of loss or injury : peril
2: someone or something that creates or suggests a hazard
3a : the chance of loss or the perils to the subject matter of an insurance contract; also : the degree of probability of such loss; 3b : a person or thing that is a specified hazard to an insurer; 3c : an insurance hazard from a specified cause or source <war risk>
4: the chance that an investment (as a stock or commodity) will lose value
Starting and then running your own gig, big or small, inevitably carries risk. But so does doing virtually anything, even working for a large, established company, especially in today?s new world economy.
But that?s a topic for another article.
What I?d like to focus on right now is the question ?Are you too risk-averse to be an entrepreneur?? Have you ever asked yourself that question? Put another way, do you think you have what it takes to go it alone and do your own thing? Here are five questions to ask yourself when thinking about that:
1. Do you need to know everything before you take action?
This is sometimes referred to as analysis paralysis, or over-analyzing or over-thinking a situation to the point that no action is taken or it is delayed for so long that circumstances change. If you have to understand every single scenario and possible outcome before you take action, you suffer from this malady. If you dream of someday doing your own thing, of being your own boss, you need to figure out how to overcome this problem; otherwise, you will never take action, because it is impossible to know everything in advance.
2. Are you willing to work long hours without being compensated?
Another way to put this: do you have an hourly worker mentality? Launching your own business requires putting in the time. It?s not free. It doesn?t come without pain and sacrifice. No one gets to where they are because they were ?lucky?. It requires you to be willing to do something because you are passionate about it, not because you want to get paid for doing it. That (hopefully) comes later, but it may never come at all. If you are unwilling to put in the time, regardless of the outcome, then don?t bother striking out on your own, because you suffer from hourly worker mentality and probably don?t have the passion and gumption to see it through.
3. Are you willing to fail?
When you have an idea for a business, the odds of it actually not failing are pretty low. That means that your chances of failure are pretty darn high. This is nothing new…most people already know this. But are you willing to accept those odds? If you aren?t, then stop right there and go work for someone else, because failing is part of the game. In fact, if you start your own thing, you will fail many, many times. Failing is not the problem. Not learning from those failures and giving up is the problem.
4. Are you willing to burn your bridges?
Starting your own thing might require you to quit your job; take out a home equity line of credit; provide personal guarantees; borrow money from your family; or other things that are uncomfortable, painful, and financially risky. There?s nothing wrong with starting your own thing on the side while maintaining your full-time job. Many people do this. But if you half-ass it, treat it like a hobby, and constantly look for immediate signs of success while maintaining your existing lifestyle, your odds of triumph will be low. Put another way, if you stick your toe in the water to test it out but are unwilling to jump in, then the likelihood of succeeding will not be very good. You have to be WILLING to burn your bridges. It doesn?t mean you have to actually burn your bridges…just that you have to be willing to burn them.
5. Do you have a supportive spouse, partner, family, or friends?
If you have to battle those closest to you every step of the way, it will be a very difficult journey. When you try things that are painful and difficult and fail at them, the last thing you need is to come home to fight yet another battle. Make certain that you have a solid support system before you strike out on your own, because you will need those people to inject confidence in you when you most need it. We all need a confidant and supporter that will be there regardless of what happens.
When I started Terraine 20 year ago, the word ?entrepreneur? was not as common or sexy a term as it is today. Back then, someone who broke out on their own was more commonly referred to as ?young, dumb, and full of …?. Basically, we were too dumb to think we wouldn?t fail. We didn?t think too much about knowing everything, about failing, about putting in super long hours, or about burning bridges. We just did it and understood that the journey would be tough but (hopefully) rewarding, and that we?d do some things right and some things wrong.
If you immediately know the answer to the five questions posed above, then you know what to do. You don?t need a set of questions to ask yourself to know that. But if you find yourself conflicted, constantly weighing your options, analyzing scenarios, and trying to decide how to answer those five simple questions, then you are probably not ready for the risks that inevitably accompany entrepreneurship. After all, one of the questions above is specifically about over-analyzing things.
That being said, you, like I, can do it, but only if you are willing to go down a path where you will never know all the answers and where you will spend gobs of time doing things that may ultimately fail without any return whatsoever…as long as you are willing to burn your bridges and have a support system in place.