I’ve been working on an educational resource for entrepreneurs and small businesses and it’s got me thinking about what it’s like to take risks in such circumstances.
Starting a business clearly involves risk taking – often the risk of giving up the steady income of ‘regular’ employment for the uncertainty of striking out on your own. There may be financial concerns (such as covering loan repayments) or consequences of a more social nature, for example the families and friends who think you’re mad to be giving up a steady job.
Back in the ‘90’s Gene Calvert wrote of such things in his book ‘High Wire Management’. He highlighted the plight of an acquaintance who desperately wanted to start his own business but was held back by the apparent level of risk, some of which included social pressure.
Calvert’s friend eventually succeeds, but only after attempting a sort of halfway house solution to his goal; he takes a part-time role which allows him to pursue his aim of self- employment the rest of the time. His partial solution is, of course, only partially successful.
It’s a good example of the how risk is so keenly felt by entrepreneurs: your finances and social standing are directly bound to the decisions you make.
By contrast making decisions in the corporate environment can be very different. Every day decisions with multi-million pound risk profiles are taken with much governance, but very little personal consequence being attached. This can happen due to the collective responsibility (actual or perceived) that comes with the corporate environment. It also happens because – to be blunt – individuals can hide in big groups.
When you start your own business there’s nowhere to hide. You stare the risks straight in the eye. This is where confidence comes in to play. But for ‘confidence’ don’t read ‘just do it’ (or JFDI, as they used to say down our way. Work out the extra letter for yourself). In good risk taking, confidence flows from a clear understanding of the risk and sound plans for handling it. After all, risk taking is not gambling, it’s choosing to do important things in a reasoned way.
All of which makes me wonder at the the number of enterprises that have failed to get started simply because the person who came up with the idea thought it was all just too risky.