But doing that was easier said than done. As anyone who has ever contemplated starting a business knows, the risks of the venture loom large. How does one leave the security of a job and paycheck and benefits for the uncertainty of a new business? The potential perils seemed too big. And then I remembered the words a wise old entrepreneur once told me:
"An entrepreneur is a person willing to take a risk with money to make money."
Right he was — risk is part of the game. There was no way around it. Trying new ideas, opening a new location, launching a new product line — it all involves risk. So maybe the first question to ask yourself if you are thinking about starting a business is whether risk-taking is part of your DNA. Because if it is not, you will have a problem from the get-go.
That said, it's equally true that the best entrepreneurs are risk savvy. They know that, while taking risks is inevitable, they should never be wild, crazy risks. Instead, one trait shared by great entrepreneurs is that they look to make their risks smart, calculated ones.
Risks: The good, the bad and the gut-wrenching
How can you tell the difference? After all, with great risks come great rewards, and as such, it's sometimes hard to see the forest for the trees.
One way is viscerally — you know a big risk when you see one. It registers in your gut. In his great book "Blink," Malcolm Gladwell posits that gut reactions are often the best reactions because your subconscious takes in all available information and registers very reliable instant responses. In other words, if you find yourself waking up in the middle of the night worried about X, it just may be true that X is the sort of risk you will want to avoid in the future.
That said, and with all due respect to Gladwell, risk-savvy entrepreneurs also use their left brain as much as their right. Gut reactions are good and all, but they cannot substitute for some old-fashioned, logical analysis.
When analyzing a business risk, consider:
•The upside potential. You are taking a risk to get ahead, so you need to begin with what can go right if it works. The problem here is that this is too often where the analysis stops because the perceived results are so darned enticing that people experience brain freeze. Don't make that mistake.