Journey of a Serial Entrepreneur

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How to get from where you are to where you want to be

5 Steps to Manage Startup Risk

“I think that only daring speculation can lead us further and not accumulation of facts.” Albert Einstein

In the first post of this series, I added a video which stated life = risk. If we shield ourselves from all sorts of risks by staying in our small comfort zone we will not be living life fully. It is our perrogative to find a balance to ensure that we live life to its fullest. The points below relate how to find that balance when starting a business.

1. Market Risk: Our world is in a constant state of flux and with mind boggling technological advancements taking place, we have to be constantly aware of the changes taking place around us. This requires us to monitor our competitors, be in touch with our customers and suppliers, and watch for trends which could potentially make your business extinct. To read more about how to manage market risk please click here.

2. Operational Failure: All companies operate on a set of processes. These processes drive all avenues of business, ranging from Internal operations, business development, sales, marketing and execution to name a few critical functions. When these processes are not optimized or closely scrutinized a business will not be able to scale effectively and reach its target goals. To read more about how you can avoid operational failure please click here.

3. Financial Risk: Without financial controls a business loses its foundation and is on shaky grounds even when the company is making steady profits. Ensuring that you have sound and reliable financial controls in place will allow you to minimize your exposure to financial risks and allow your business to grow more effectively. To read about how you can add financial controls to your startup please click here.

4. The People Risk Factor: You hear it all the time, “Our people are our most important asset”. Its like a mantra that has been wedged into our sub conscious and is constantly repeated from board meetings to your daily staff meetings. However, I am always surprised that though this is such an important asset, very few steps and measures are taken to mitigate the risk associated with this asset. To read more about how you can add effective control measures to mitigate these risks please click here.

5. Lessons in Risk: Having been in this line of work for some time now there have been several risk factors which I have witnessed or experienced first hand. These cover the time you should start, what the risks of starting without a plan are and the kind of risks you have to deal with on a daily basis. To read more about these lessons please click here.

In life and business, if you stop taking calculated risks, or if you let doubt  paralyze you, moving forward becomes close to impossible. It is only when you make mistakes that you learn from them and eventually move forward. Along the way we have to manage the types of risk faced and ensure that we take precautionary measures to avoid risking it all if we do not know where we are headed. Once you know what you want and how you want to get it, take action , because thinking ‘what if’ is just about the worst thing you could do to yourself!

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Personal Experiences With Risk

“Be brave. Take risks. Nothing can substitute experience.” Paulo Coelho

The risks mentioned in prior posts provide a framework on mitigating risk in various divisions of business. Some of the risks and counter measures mentioned in this post are general and some those I have personally encountered during my journey as an entrepreneur. 

1. Start as early as possible: The younger you are , the lower the  risk level when embarking on new startup ventures. This is a point in life when you do not have many personal responsibilities and can hence take on greater leveraged risks, for greater payoffs. There will never be a right time. If you wait around for it, you drastically reduce the level of risk you can take . 

2. Don’t start without a plan: Starting a business is a lot of fun and very exciting, however, if you do not have a solid business plan which has been well researched and developed, get working on that first. I am not a fan of shotgun startup ventures who are clueless about where they want to go and how they plan on getting there. 

3. Learn to trust your gut: There will be times when the plans looks too good to be true on paper, but your gut feeling is to be wary. On the other hand ,there are times when the pieces do not fit into place initially, yet, your gut says this is worth exploring. Learning to trust your gut allows you to hone into your inner guidance system and intuitive capabilities.

4. Don’t forget your core values: We are constantly faced with challenges where compromising on core values could lead to substantial benefits. However, going down that path poses great personal and moral risk . I have personally known someone who went down this path and ended up losing everything that mattered in his life. It was an incident which left a deep impression. Compromising on core values is one of the greatest risks you can take and one where the consequences are long lasting & long term.

Some of the concepts mentioned in this posts have many counter arguments. Such as the first one, which is to start early. Some argue that it is better to get some work experience before venturing out into the startup world. Others believe in just starting a business and hoping to eventually make some money. I would really like to hear what your thoughts about this are. Look forward to hearing from you.

 

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Lights…Camera…ACTION!

“What we think or what we know or what we believe is, in the end, of little consequence. The only consequence is what we do.” John Ruskin – English author, art critic and social commentor

You have got it all going, the goal, the planning, the team but somehow you are not gathering the traction you need to move forward. This unfortunately is something that many people experience throughout their life. The reason being; too many people like to talk big and make grandiose plans but when it comes to actually DOING them; this one step separates the people who are successful from those who are not.

Unless you make a conscious effort to get out of your comfort zone, nothing is going to happen. When you take an action step you make a sub conscious commitment to move forward. You start a series of event like the ripples when a stone hits the water. These will provide you with valuable feedback, attract the right people to your side, people will take you more seriously and things which may have appeared difficult to start out with will slowly unravel into manageable tasks. You will most certainly make mistakes along this path, learn from your mistakes. They will be the most valuable lessons you will ever experience in life. I was involved in a project a couple of years ago. I was being pitched to invest in a new concept store for an industry which was thriving. The plan looked great but in that first meeting I didn’t get the correct vibes from the person who was going to head the project. However the numbers looked way to good for me to pass up on the opportunity. Well I guess you can imagine what happened, 8 months later we were closing shop as the partnership was just not working. Ever since that day I have relied on my “Gut Instinct” a lot more.

That lesson may have cost me but I strongly believe that I learnt something which will be invaluable for the rest of my life. So there is no shame in failing, just remember to learn from the mistakes you make along the way. Don’t make excuses to wait a little longer, there will never be a perfect time. Get up and enroll in that course today, get that gym membership, start that company, write that business plan, go back to school. Just make sure you DO IT NOW!

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