Risk gets your foot in the door to getting rich. Taking the right risk makes you rich. If you want to hold a security blanket tight then you’re not going to get rich. However, if you’re willing to try things you think have a good shot of working, then you expose yourself to the chance of making more money.
Intelligent Risk + Leverage of Risk = Make Money/Risk Leverage
In other words, the more you’re willing to risk, the more you can make. However, on the flip side of this, the more you risk, the more you stand to lose if you’re business plan does not work.
Never risk more than you can afford to because the mathematical odds are that your business plan will fail in some form or fashion.
Failure = Not Making Money or Losing Money
I want to tell you a story of a guy I know about. He decided he wanted to start a book store in the city. His rationale was that he wanted to go for it. The problem is that his book store idea and actual bookstore are extremely flawed in many ways – from concept to execution. He invested his entire savings at 55 years old.
This man was definitely willing to take the risk but he invested it into a horrible idea that failed miserably and will ultimately cost him all his money.
He was not a smart businessman and so it was a bad idea for him to take the risk. You want to at least have a chance at the starting gates. This poor fellow risked it all right in the beginning yet was dead in the water immediately.
So let’s say you have $1,000 to invest into your new business plan, whether it be starting a store, starting a home business, investing in stocks, or whatever. Before you actually spend the money, map out your costs and how you plan to recoup them. Look around to see if anyone else you know has started something similar and done well or not done well. See if they have any advice on do’s and dont’s. The Internet is a great place to look.
Also, ask smart business people you trust to give you their honest opinion. You don’t need yes men (or women). You need harsh critics. Encourage brutal critiques and ideas and don’t get defensive or angry if someone blasts you – THIS IS WHAT YOU ARE LOOKING FOR!
Just because someone hates your business idea doesn’t mean it’s not worth doing. It just means one person finds flaws with it. That said, you should take a closer look at their opinion and scrutinize your business plan even more.
You don’t want to kid yourself. People that kid themselves end up going broke. You need the real world truth. Once you have it, design a detailed plan, and put it to the test! Risk your money and see what happens! No plan is fool proof and you might fail but that’s ok if you only lose what you can afford to!
TIP: Start small with your investment when possible (ie $1,000 or less) and grow bigger as you become more successful. Lower risk and there’s always room to grow and scale your business if it’s great!
Filed under Blog by on Mar 3rd, 2012. Comment. 
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