Entrepreneurs Don’t Take Risks February 1, 2010

Friday, January 29th, 2010
by Joe

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There is a big misconception in business that says if you’re an entrepreneur then you take risks. I understand where that comes from; however, this couldn’t be further from the truth. Real entrepreneurs don’t take risks. They take ‘calculated’ risks meaning they are 90% sure the outcome will be favorable.
You see, there are people’s lives on the line here. One wrong risky decision could cost jobs and dramatically shake up families lives. Every venture I get myself involved in has an out. I always put in measures that allow me to walk away. I know what my risk tolerance is and when to pull out. On major decisions, I’ll even secure a line of credit to support it just in case anything unforeseen happens. The line of credit is not there to use, it’s there for an emergency.
If you’re in business for yourself and have put yourself in a high risk position, you are not a true entrepreneur, at least not yet. I know folks who have done this on great faith and I pray they get their income streaming so they can realize they won’t need to put themselves in that position again. I’ve recently purchased a building with two tenants. My company will be moving in this new location along with the two tenants in the spring. Some have said, “Well, if you have tenants it’s safe to move in to the building because they can help pay the mortgage.”
While that thinking is true, an entrepreneur makes sure their business is secure enough to float the entire mortgage should their tenants go out of business. It is so important my associates know this is a safe investment and we are in no way making decisions that could jeopardize their employment with us. Make sure you make sound decisions. Have a strong risk threshold, meaning you don’t take risks. Entrepreneurs make investments based on sound facts and strong intuition.