Imagine you stand at the edge of an enormous cliff, a parachute strapped to your back. To your right is a winding staircase with a sturdy handrail. There are only two ways off the cliff—jump or take the stairs. If you jump, once you reach the bottom, you’ll be awarded the exact amount of money you and your family need to live a happy and comfortable life. If you take the stairs, you’ll reach the bottom and walk away—nothing gained, nothing lost. Will you take the risk knowing there’s a slight chance the parachute won’t open? Or will you take the safe way out, knowing a life of mediocrity awaits?
This is the dilemma entrepreneurs face every day. Risk is eternally linked to opportunity. There is nothing wrong with taking the safe way out—millions make that choice—but successful entrepreneurs are a different breed. They are professional risk takers and they need to be willing to strap on that parachute every day.
Though we typically associate risk with the initial leap-of-faith decision to start a business, to achieve real success, one must consistently embrace risk every day, and not just on the business’s first day. A willingness to take risks separates leaders from the rank and file. If you lose the spirit of risk, the business begins to decay. From startup through the last sale, the spirit of risk is the unexpected edge for every business.
Here is an overview of the risks you must accept if you want to build and run a sustainable, profitable business.
Be the pig. “Are you a chicken or a pig?” I frequently heard one of my business partners, Phil Turk, ask this odd question. One day, I asked him what it meant. Phil explained, “Think about a bacon and egg breakfast. The chicken is involved, but the pig is committed.”
Lending an egg to a breakfast meal, the chicken participates but sacrifices nothing. However, the pig literally has skin in the game. He is most definitely fully committed. Following your entrepreneurial dream by giving everything you have is like being the pig: You have to be fully committed.
Finance the dream yourself. Giving up your hard-earned money is the ultimate risk. To pour life savings into an entrepreneurial pursuit is like walking the tightrope without the benefit of a safety net. It takes courage. Even though the commitment is substantial, it’s necessary to motivate you to keep pushing forward. Money buys resources, technology, and manpower—all critical elements in helping a new business succeed.
Sacrifice your most precious possession: time. When you pursue a new enterprise, one resource that cannot be reimbursed, borrowed, or saved in an account for later use is time. Time is the most perishable resource of all. Time is finite; it’s more precious than money and more costly to waste.
Don’t be a non-decider. In business, you need to decide over and over again. The first decision you make is to jump in and pursue an entrepreneurial dream, but decisions don’t end there. And every time you make a decision, there’s a risk: These are the risks of failure, not being accepted, and making wrong choices. Don’t let that stop you. By making decisions, whether right or wrong, you are progressing and moving from where you were to something different. You make your move and then embrace the risks that come with that move.
Change or die. Businesses are like sharks: They have to keep moving, or they will die. The rule is simple: Businesses must progress, and progress requires change. In the business world, fear of change probably is the single biggest obstacle businesses need to overcome to meet the evolving marketplace challenges. What makes embracing change even more difficult is that a business must be willing to simultaneously change internally and externally to keep progressing and remain competitive.