I’ve seen there is often a disconnect between what you as entrepreneur want from the business and the risks you are willing to take.
And this isn’t just a theoretical disconnect. I’d argue you can’t develop meaningful goals for your business without reconciling this conflict.
Let’s deconstruct that, and then talk about a couple of examples.
First, it is CRITICAL that you are clear about what you want from the business. Income, yes – but how much? Is it more important for you to make a comfortable wage, or are hoping to make a LOT of money growing or selling your business?
How important for you is to to change people’s lives? Or give back to your community? Or simple make something cool? Is it because you like building things? Fixing a problem? Making customers smile?
WHY do you want to create a business? Or WHY EXACTLY did you create the one you have? Some people tell me, “Oh, I don’t know. I just knew I didn’t want to work for “the man” (or “the woman” – but that is not enough clarity to move forward with a successful business. I always admire those people who seem very clear on their “why.” Some people, I suspect – maybe because I’m a little jealous! – clearly state why they started and are running the business they are, and I’m not always sure if it’s the truth or just that they’ve perfected a good story line. In any case, there are clearly some of you out there who really ARE CLEAR about why you started and are trying to grow your business every day. You ARE indeed lucky!
Many of us truly aren’t very clear about WHY we started the business we did, or why we work so hard at it.
If you’re struggling with your “why,” I have recommended in the past and wholeheartedly recommend again Simon Sinek’s “Start with why,” and his followup book, “find your why.”
There are lots of other exercises out there on the internet, some of the best of which are linked here on my website But I think Sinek’s books are the best – it is difficult to see ourselves clearly sometimes, and what I like about his books is that they take you through some of the mental – and emotional — preparation that’s needed to see ourselves and our motivations more clearly.
OK, so that’s what we are entrepreneurs WANT from our business. Now let’s talk about the other side: what risks are you willing to take?
The risks you take can take lots of forms. Most people probably focus on the financial aspects. And that’s a pretty important one. Are you willing to mortgage your home or take on a second mortgage? Are you willing to spend down all your savings? Do you have enough cash saved up to last you for several months or even a couple of years? Are you willing to tap into your IRA? Are you willing to take out a loan or borrow from friends or family?
But it’s not just money. Are you willing to move out of your comfort zone – sometimes frequently? Receive criticism? Have friends and family think you’re crazy? Spend long, long hours away from your family? Take risks when you have no idea whether you’re making the right decision?
Whatever the risks in your situation, make sure you’ve VERY explicitly discussed these with your family, as well as your business partners. As we talked about last week, all too often, the costs are greater than we anticipate, and that can leave you feeling stressed, overworked, and sometimes not even enjoying the process, but feeling trapped because you’ve come so far to throw it all away.
I’ve seen quite a number of would-be entrepreneurs who can’t move forward, because they can’t reconcile this disconnect between what they want in a business and the risks they are willing to take. A woman who wanted the security of a franchise restaurant model, but dreamed of creating new, interesting dishes with her daughter. Another women who wanted to open a high-end daycare, but unwilling to mortgage her home to finance the facility investment she would need to make. A physician with a novel medical device who insisted on being the CEO, but just couldn’t accept taking less than his current salary as a doctor with a successful practice. Another man with his grandmother’s cupcake recipe, but who couldn’t make any decisions about how to create a business around this.
As we talked about last week, the answers to these questions will drive a lot of your daily decisions – how you spend your time, who you hire and what you delegate to them, and how you invest in the business, and even were you look for funding and how much you are seeking.
And as I said earlier, it is not possible to make meaningful goals without being clear about your tradeoff between what you want from your business and what you are willing to risk.
You may find the risks are greater than anticipated, and so your goals may change once you realize that – and that’s OK. It’s a normal part of the journey.
But your path will be much clearer if you’ve got a good handle on what you what from your business, and the risks you’re willing to take from the very start.