Many people believe entrepreneurs are the ultimate risk takers. A career of finding your own clients, spending your own money to keep a business running, and the lack of a regular paycheck can prevent interested people from starting a business. But is starting your own business really that risky?
Contrary to what many people think, many successful entrepreneurs are, in fact, low risk takers. As a business owner, every single decision you make can directly impact your financial success. Since every decision carries so much weight, many business owners are moderate, but analytical risk takers.
As someone who is risk-averse, I was so nervous to start my own freelance writing business. I tried to talk myself out of it several times. But the fact of the matter is, I took baby steps and am now running my own freelance business. And I will tell you – it really wasn’t as scary as I thought it would be. Heck, in reality, I really had nothing to lose.
All too often, people speak about their interest in starting their own business but deem it “too risky.” The truth is that you can do whatever you’re passionate about by taking some well thought out risks.
You don’t have to risk financial or emotional trauma by starting your own business. Here is how anyone can start their own business, even if you hate taking risks.
Come Up With a Business Plan
By being prepared and having a plan before you start a business, you are already lowering the risk significantly. A business plan will help cast the vision of your business and ensure you are making the best choices to benefit your company.
You don’t have to pay pricey consultants or analysts to create a business plan for you. In fact, you can start by searching for free business plan templates online. You can always go into more detail, but these will give you the perfect starting point.
Calculate the Investment Cost – Before You Spend
What type of business are you wanting to start? More importantly, how much is it going to cost you?
Since I’m not a big risk taker, starting my freelance writing business was the perfect choice for me. The startup cost was extremely minimal (You can start a website for just a few dollars a month.) However, if you are looking to start, say, a landscaping company, that will require you to pay a lot more money up front for equipment, labor, and supplies. Are you prepared to make that investment right off the bat?
Start Small
I think this is where many entrepreneurs can fall short. When you first start out, it’s tempting to dive right in and make as much money as you possibly can. But this is dangerous and risky for a few reasons.
One, when you first start out, you don’t necessarily have all of the correct processes in place. It takes time to figure out how to systematize and organize everything. This can cause errors in client work. If you have too many clients, then you’re not able to spend much time rectifying it or making sure the client is the priority.
Two, when you first start a business, you need to build a history of success before other companies will want to work with you. This means that your first couple of clients need to be given the best service possible. Take time to perfect your service model, build up a repertoire in the industry, and build gradually from there.
Start Your Business as a Side Hustle
You don’t have to run a business full-time. In fact, you can run a very successful business while still working a full-time job and collecting a regular paycheck.
If you are working your business as a side hustle, you are minimizing many of the risks. For instance, if you end up not liking what you’re doing for a business, then you still have a fallback option. If you’re worried about your business earning enough to provide a full-time income, then consider keeping your full-time job for awhile.
It isn’t easy to work a full-time job and run a side business, but with some hard work and stellar time management skills, it can be done.
Find a Mentor
One of the smartest moves a potential business owner can make is to seek advice of someone who has built and run their own successful business.
A mentor can be the most valuable resource to you as a business owner. What entrepreneur do you know who you look up to? What do you think you could learn from him or her? Write down some questions you have and ask your potential mentor to grab some coffee.
Utilize Free Resources
You don’t have to invest in a pricey MBA degree to be a successful business owner. There are so many free and cheap resources available to business owners. You just have to take the time to look for them.
One good place to start is your local library. Of course, libraries offer obvious free resources, such as business books, but many libraries also offer a number of surprising resources. For instance, through my local library, I can take free classes on Lynda.com.
Podcasts, blogs, magazines, and networking events are also great and affordable resources for anyone looking to start their own business.
Value Customer Service More Than Anything
You could have the best product or service on the market, but if you aren’t providing stellar customer service, you are going to have a hard time to recover.
With the internet at everyone’s fingertips, people rarely purchase a product or service without reading reviews. If people hear bad things about your level of service, your growth as a business is bound to be stunted.
Use Your Network
Instead of investing in expensive marketing strategies or advertising, try using your current network to find business. The best business comes from word of mouth, networking is a huge opportunity for your business that costs you next to nothing.
And you can grow your current network by joining different groups and organization in your city. Some of the most successful entrepreneurs I know are involved in several groups within the community and tend to know people wherever they go.
Another advantage of networking is that you are bound to find people with the skills to help you along the way.
Starting a business doesn’t have to put you at risk for financial disaster. By making some wise decisions and sacrifices, you are increasing your chances of success, all while minimizing risk.
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I’m totall yagree with you and this post, especially now that we have a “family business”:D
Thanks, Giulia! I hope all is well with you and your family!
I think starting your business as a side hustle is integral. That way you find out whether there’s enough demand for a full-time endeavor and/or you’ve built up enough of a client base to take it full-time.
Freelance writing is probably one of the least risky entrepreneurial endeavors for that reason: no overhead (unless you don’t already have an Internet connection at home), no cost to start and quite a bit of demand in the blogosphere. So it seems like you made a pretty great choice!
Thanks, Abigail! I definitely agree that one of the best things you can do is to start a business on the side first. I can’t imagine up and quitting my job to start a business, especially one with a lot of overhead expenses. Some people can do that and are very successful, but it’s not for me!
I started my now full-time business as a side hustle, and it was the best decision I’ve ever made. I also recommend starting as a side hustle, because you’ll have a little nest egg if you work until you can’t (or don’t want to) work anymore for someone else. Thanks for sharing!
Thanks, Chonce!
My businesses are all currently side-hustles, and I intend to keep them that way, at least for the time being. The safety of the job plus the benefits, especially health care, are too good to pass up!
As far as coming up with a business plan or calculating the investment cost (of which I have really done neither, at least not formally), that runs the risk of what people call “analysis paralysis” where you spend so much time trying to figure things out that you don’t actually do anything.
I definitely agree with you on the additional benefits of having a full-time job. I tend to disagree that traditional jobs are necessarily safer than running your own business – I’ve seen too many people get comfortable at their job only to be laid off. Each has their own risks. But healthcare is a huge advantage of traditional jobs.
I’ve never heard the phrase analysis paralysis, but I like it! So true. I see many people get too stuck in the planning process that they never start. But I do think taking a little bit of time to map out a business game plan is very worthwhile. I just found a business plan template online. It took maybe an hour to fill out. It wasn’t super detailed, but it really helped me better understand my business objectives and market.