What is risk? That question was posed by a professor to sixty MBA students who were executives of public corporations.
I was reviewing my notes from the book, The Millionaire Next Door this week, and transferring them to digital format. My copy of the book is so old, I think Gutenberg himself printed it. E-readers were a fantasy when this gem came out. And yet, the book is still relevant today.
In the book, when the professor asked that question,
One student replied: Being an entrepreneur?
His fellow students agreed. Then the professor answered his own question with a quote from an entrepreneur:
What is risk? Having one source of income. Employees are at risk…They have a single source of income. What about the entrepreneur who sells janitorial services to your employers? He has hundreds and hundreds of customers…hundreds and hundreds of sources of income.
I was asked a similar question recently at dinner with some new friends. When I mentioned that I went out on my own almost two years ago, one man replied, “Wow. That must have been scary and risky.”
Scary and risky? Far from it. I told him that becoming an entrepreneur was the least risky thing I have ever done in my life.
I went from having one income to multiple incomes. I went from the constant threat of a company selling and my family getting left in the cold to no such fear at all.
As an entrepreneur, the loss of a single client is an inconvenience, not a catastrophe (assuming you’ve built your business right). The loss of your sole employer, however, is often catastrophic.
This is not to say that you must drop everything and become an entrepreneur tomorrow. But, if risk and fear are holding you back, consider the idea that entrepreneurship is the employment equivalent of investment diversification. Instead of putting all your eggs in one basket, you spread the love…and the risk.
Have you ever dreamed of owning your own business?
Have you dreamed of changing the world with your product?
Has fear or perceived risk held you back?
What else has held you back?
Questions?
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I see your point and definitely agree. However, entrepreneurship is somewhat risky because you don’t have the steady cashflow, especially starting out. I’m 3 years into my journey and that’s been the worst part about it. That said, the idea of being able to own my own thing and build multiple income sources make it all worth it.
Interesting insight for sure and something too many people struggle with. There’s book on this actually. Haven’t read it but I believe it’s called Risky is the New Safe. It addresses this exact topic you talked about here.
That is one of the beautiful things about doing your entrepreneurial venture on the side early on.
That is what I did. I did just enough to start the business, picked up a few clients and when I left my job, I knew it would be easy to transition to full time on my own. Doesn’t always work that way of course, but if you build it when you don’t need it, it reduces the stress of needing the next client to survive.
Yeah definitely. I didn’t do it right and while it’s working okay it would have been a much different story had I planned it out properly. 😀
Well, I think you know my answer. Being the sole responsible for bringing in the income I need to support my family in our financial goals is not scary. It’s terrifying. Reading your post, I compare it with the way people use credit. Having a credit card makes us feel safe because we have a cushion, a cash pile we can tap into. However, when you’re debt free and don’t live paycheck to paycheck and you’re in control of your finances, it’s incredibly liberating. I know may entrepreneurs who have gone into business for themselves as the result of a crisis. It’s a sink or swim situation. It’s go out and sell whatever so we can put food on the table. No time to plan or think ahead, it has to be done. Fear and adrenaline get them through. However, I love the statement “assuming you’ve built your business right”. If you have taken planned and calculated steps, you can certainly experience the freedom of controlling how much money you want to make.
Thanks for the encouragement. It does feel less scary now.
haha, after reading your comment I cant decide if you actually feel like its less scary or not 🙂
It’s about 2 points less scary than it was before I read the post. 🙂
2 out of how many? 20,000? hahaha
I’ll take it. Whittling away at FEAR.
Nice post. It’s interesting to hear what it’s like to go out on your own. I like the idea of having multiple incomes. It plays off last weeks post by Micheal Hyatt on Passive vs Active income. http://michaelhyatt.com/passive-income.html/comment-page-1.
I had a chance to meet Micheal last week – man is he a nice guy.
That was a great post from Michael.
Yes, fear and risk have certainly held me back. Alot of times I fear that I don’t know enough, I’m not old enough, I don’t have certain skills. And therefore I stop myself before I even get started!! Pretty dumb, really.
Thanks so much for the post Matt!! Good stuff to think about and remind myself of as I continue to work toward diversifying my work and my income streams 😉
You’re actually right Mark. You’ll never know enough or be old enough to do anything…alone.
You’ll never be old enough to be perfect at your job for someone else. You’ll never know enough to be the perfect employee. But that doesn’t stop you. 🙂
I’m pleasantly surprised you didn’t stop that at an insult 🙂 I totally expected it. As I read the comment I was formulating my retalliation, and then you brought it around to be encouraging…part of me was disappointed!
(and don’t use the “e” word towards me!! haha)
wow, no lie, I just went through this town this morning, Startup WA. Now I’ll read your post!lol
Wow. That is too cool.
Ok Steve, now my interest is piqued…where is Startup? If you know where it is, I certainly ought to! We live awfully close to eachother!
It’s northeast of Seattle. Link to wiki here: http://en.wikipedia.org/wiki/Startup,_Washington
eewwww….THAT side of the mountains…no wonder I haven’t heard of it 😉
Beautiful town, we used to drive through it on the way to…. places when I was a kid (grew up in Seattle).
I’m hoping for something that will take away that nagging ache in my chest that shouts “YOU’RE NOT DOING WHAT YOU’RE SUPPOSED TO BE DOING.” I feel the call to own my own business, but what’s my “product?”
You will know when you know Kathy. That might seem like a lame answer but its true.
When you see something broken and know you can do it better, that is your product.
When you wake up thinking about a product, that is your product.
When you think of something that doesn’t exist, that is your product.
Often, your product is you…it’s your knowledge, experience, and desire to help.
By your definition here Matt, I could quit my job and make a living just breaking your blog, your email, your child’s bicycle, your coffee mug, your will, and so on and so forth 😉
I’m sure risk has held me back. I’m not known to be a risk taker, but I can see how risks or leaps of faith along the way have led to big wins. For example, last year, I decided to take a leap of faith journey to Guatemala. The trip changed my life, and I’m preparing to head back there with my whole family this summer.