In order for us to move forward in our lives and our businesses, we need to take on risk. However, there seems to be a pervasive feeling that being willing to sink or swim is required to be successful.
In my experience, that couldn’t be further from the truth. In fact, one of the best things you can do is not take on more risk, but rather, mitigate risk.
Let’s say that you have a new business idea. For many people, the logical next step would be to try to find an investor for the idea, or perhaps even fund it themselves. But ideas don’t get you anywhere today- it’s all about the execution. So, how can you take the risk out of this new business idea for yourself or an investor?
Can you find some paying clients who will be willing to test or even better, purchase, the product or service?
Can you build a working prototype to show your product’s functionality?
Can you start out on a small scale and demonstrate that not only you can get customers, but they come back as repeat business?
Or can you accomplish any host of other milestones that demonstrate your ability to execute the viability of the business model and the customer demand?
This doesn’t mean that you won’t have any risk, but it certainly mitigates the risk for you and for any other people (e.g., investors, employees, partners) you may want to get involved.
There will always be situations and circumstances that pop up that you didn’t or couldn’t plan for. But the key is that if you plan for the situations you can plan for, at least you can focus on solving one issue that may arise- instead of having to put out a dozen fires at once.
I’ve yet to hear anyone say, “I’m so bummed that I prepared for that. Boy, was preparing a waste of time.” But I have dozens of examples of regrets for not being well enough prepared.
Carol Roth is a national media personality, ‘recovering’ investment banker, investor, speaker and author of the New York Times bestselling book, The Entrepreneur Equation. She is currently an on-air contributor for the national cable television station CNBC, the pre-eminent name in business news, and the host and co-producer of The Noon Show, a current events talk show on WGN Radio, one of the top stations in the country. Carol multimedia commentary covers business and the economy, current events, politics and pop culture topics.
Carol has helped her clients complete more than $2 billion in capital raising and M&A transactions. She is a Top 100 Small Business Influencer (2011 &2012) and has her own action figure. Twitter: @CarolJSRoth