‘Put your money where your mouth is’ was the working title for this blog. Why? Because when talking about entrepreneurship and risk-taking, I’m a firm believer of putting yourself out there first. If you’re committing your own time, energy and money to a project, others will dare to take a gamble on you too.
Some might call me cautious, others say I’m conservative. I think of myself as an entrepreneur who dares to take risks, as long as I can bear the consequences myself. I do not gamble with other people’s money.
At StartUp Nijmegen, I have seen my fair share of young and enthusiastic entrepreneurs who come in with big ideas. They want to open up big storefronts right away, or automate their entire business and start off with a team of experts. And they are looking for investors to get their plans off the ground. I however, would suggest starting by using your own skills and qualities. It’s all about working very hard to create something. Once you are buckling down yourself, investors will come naturally.
Convince yourself first
I believe that when you put everything you have on the line – energy, time and money – because you believe in what you are doing, this will be seen. Once you yourself are convinced of your plan, others will start backing you.
Let me paint you a picture: I once ran an advertising agency. Employees came together to create a campaign for our clients. They would pitch ideas and I would ask: “Would you do this for your own business, too?” If they denied this or it took too long for them to answer, we’d know this wasn’t the right path. “How can you sell something to the client, that you yourself don’t believe in?”
What’s more, I strongly believe in doing research. Think critically, assess your product-market fit, validate your options, and make a decision. Make choices every day, but make calculated ones. Some might turn out to be bad. Some might be expensive mistakes. But you will limit the risks by only making choices that have consequences you can bear yourself.
Cash flow is key
Once you have established your product, your company is thriving and new opportunities, chances and risks present itself daily, it is time for another type of risk-taking. For me, successful entrepreneurship is all about taking these calculated risks. I want to be able to pay for my own mistakes.
In this, cash flow should be key. If I’m about to take a decision, that is what I look at. Can I take the hit if things go bad? If I can, great – let’s jump in. If not, I won’t do it. Always make sure your company has enough cash flow to cover dry spells. Make sure salaries can be covered for a while if orders might stay out. Grow with a positive cash flow and you will grow healthily.
Do you see your cash flow drying up? Then you’ll have plenty of time to turn the tide. Maybe lay off some employees, increase profits by increasing productivity or move to cheaper offices. Once you have surrendered yourself to sharks, investors or a bank, you lose a lot of say in your business. And wasn’t doing what you wanted, why you got into it in the first place?
Want to talk more about risk assessment?
Feel free to reach out to me or to my colleagues at StartUp Nijmegen. Always happy to help!