Starting a business is challenging and risky yet rewarding. Taking risks in business is the only way you will become successful. If you don’t take risks, you will never know what works in business and what doesn’t. That’s why it’s important to know that there are risks you will need to take to get the results you want as an entrepreneur. Based on my own experience as an entrepreneur and what I have learned and observed through other entrepreneurs, the following 3 risks are risks that you will have to take as an entrepreneur at some point if you want to be successful:
Investing your own money into the business – Bootstrapping when you first start a business is pretty much the “norm” in entrepreneurship. Even for those businesses who raise outside capital at some point. Lenders and investors will want to see that you have invested some of your own funds into the business before they will consider investing their money. Investing your own money can be extremely risky because there is no guarantee that the business will be successful. You have to go in knowing that there is a strong chance you will lose every penny that you invest. I once had a client tell me he lost $3 million dollars of his own money in the real estate industry after working in corporate America for 30 years. The risk of losing your money in business is real.
Quitting your full time job – I made the mistake of leaving my full time job a little too soon after starting my business. However, I was eager to grow my business so I could create a full time job for myself. Working a full time job for another company and trying to build a business of your own can be time consuming and exhausting. Eventually everything worked out for me but on the days I was short on cash, I questioned whether or not I quitting my full time job was a smart decision. At some point you will have to quit your full time job if you want to build a successful business, just be sure you do it at a time when you are financially stable and secure. It may be a good long while before you can begin paying yourself and living off of the money you earn from the business.
Paying yourself little to nothing during the first few years – Many new business owners have to forfeit paying themselves for the first few years of operation. It’s a sacrifice that we all have to make. That’s why it’s important to be financially stable and secure before starting a new business. If you’re not, you may have to work a full time job while you grow the business, which could potentially slow down the pace in which it grows. Not paying yourself during the first few years could help you save up the cash you need to pay for business expenses such as supplies, employees, and most importantly yourself!