Home Motivation ENTREPRENEURSHIP AND RISK: HOW BUSINESS STARTUPS SHOULD DEAL WITH RISK

ENTREPRENEURSHIP AND RISK: HOW BUSINESS STARTUPS SHOULD DEAL WITH RISK

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How Business startups deal with risk

Ride or Die: This thing called risk. Business startups will always face challenges because starting a business is all about risk.

There was a pretty cool term made popular by Black hip-hop culture in the mid- nineties- ‘Ride or Die’. The phrase is attributed to a spin on the Bonnie and Clyde legend and is used in reference to unwavering loyalty even in the face of death.

That phrase is back, appearing mostly on the list of qualities a young man wants in a partner. Yup! Ask any young man (who’s in tune with pop culture) and he’ll tell you, “I want a ride or die chic; a girl who’s in it for the long haul; who will stand with unwavering loyalty to the person she loves; who takes the phrase, for better or worse, seriously.”

With or without knowing it, what they are inherently asking for is someone who recognizes that they are entering into a situation that has its uncertainties, one that is filled with risks, and still has the right attitude about it. You see, most people would call Ride or Die a quality. It is actually more of an attitude. An attitude every Entrepreneur must come into their startups with.

Entrepreneurship and Risk

Starting your own business often means plunging into risky waters – it is a sink or swim situation. No matter what business venture you plan to go into, you will face several risk factors that will give you reason to pause and analyze. Some businesses require their potential owners to abandon the stability of a steady paycheck. This means that for months, maybe years, there’s no guarantee of personal income. The frustration of a lifestyle shift, inability to meet basic financial deadlines, e.g. rent, school fees, electricity bills, etc. can be daunting enough to make you turn tails and run back to your ex-job.

The thought of sacrificing personal resources whether it’s capital, time or mental health can also stop a potential business owner in her or his tracks.  The endless hours you have to put into making your business work means you’ll have to miss out on personal friendships for some time. Entrepreneurs are by nature go-it-alone people because they alone can see the ultimate big picture they are working on. But all that extra money and time spent working and worrying will take a toll on your sleep, personal time, maybe even health as you might experience more stress than you plan to.

Above all risks that a business startup may consider, human factor poses the highest threat. From the risk of trusting employees to the risk of estimating interest in your business. In everything, uncertainty looms. This is because of all business factors, people are by far the most unpredictable. Loyalties sway, employees can be poached or worse could poach your customers from right under your nose. Customers could start out liking what you have to offer and change their minds just as suddenly.

To Risk or not to Risk

The fact that there is risk is no reason not to plunge into the unpredictable waters of business. Dr. Martin Luther King Jr. is often quoted as saying “The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.”

Being scared and uncertain comes with the business territory; so do big risks. It’s your reaction to risk that draws the line between a failed and packed up business and a successful and constantly evolving business.  Successful businesses can never be described as standing still because the risk factors, the challenges and the fear cause them to learn and grow and ultimately keep those businesses moving.

One way or another, risk, even when it causes setbacks for business startup, causes the ride or die entrepreneur to forge ahead. World-renowned management consultant, Peter Drucker, who pointed out that ‘Whenever you see a successful business, someone once made a courageous decision’, better captured this thought.

Perhaps the greatest risk of all is not risking anything. Business startups come with the promise of stumbling blocks, possible failure, long waiting periods, discouragement and even the likelihood of complete do-overs. But it is key to note that the greater the risk, the greater the reward.

The Ride or Die Entrepreneur

A certain friend of mine, let’s call her Susan, graduated from school with a second class upper grade in Banking and Finance from a reputable private university in Nigeria. Susan shone through at the graduate job fair and very quickly bagged an internship at one of the leading banks.  She remained with the bank for seven years – through national youth service, cut backs, mergers, and layoffs. Susan remained untouched. She was a hard worker, quick on her feet, and a solution provider. This also meant she got promoted quickly. Ideal right? One would think so! We all thought so! Except Susan! She wanted to do her own thing – start her own business and carve her name deep into the fashion industry. Follow this link to read 14 small business ideas to invest in.

Why? Well, according to her, the paycheck-to-paycheck was not working for her anymore! She wanted to be dependent on herself. As sure and certain as she sounded, it took her about a whole year to turn in a resignation letter she had written. It took another month to find a shop that could only accommodate two tailors and a desk for Susan to sketch. After this her challenges came in quick successions. First she realized nobody in her vicinity wanted couture designs. They just wanted clothes from plain old catalogues. But she was not a tailor. She was a designer! After 6 months, the rent was due. She had a scanty client base and was running at a loss. It was time to switch things up. She expanded into tailoring services, offered free fittings and delivery in the vicinity, etc. On the side, she made couture clothing and began to pursue the smaller fashion shows. Here she met with a big-name designer whom she offered to intern under for six months.

Susan went from a size 12 to a size 8 in this period. She was exhausted and tired all the time. The tailoring aspect of her business was doing great – clientele had risen by 70% and she had a direct line to many of them. And she had started to sketch designs for her next exhibition. Then came a decision in the estate where the business was situated that commercial services were no longer allowed within. She had to pack up to the commercial zones where shops rents were five times the estate rate.

Without pause, Susan moved the tailors into her living room, then printed fliers and distributed every chance she got. She finished up her line for the exhibition then found that one of her tailors had sold her designs to a competitor.

The next time we saw Susan she was putting in all she had saved up into entering for what would be the biggest fashion week in Africa. We thought it would be a good idea to slow down but Susan pulled out backup sketches, tweaked them and hired new tailors to meet the demand for the tailoring business (which she was still doing out of her home). If she failed, she would have nothing. She knew that, we knew that, but Susan said this was her sink or swim moment.

She entered the exhibition and, yes, she got noticed! She’s now supplying her designs to major stores around Africa and she’s expanding and employing more. She’s learnt lessons and she has grown but there’s always that nagging voice. Once I asked Susan, “Babe, what if it hadn’t worked? If you hadn’t been noticed?” Her answer lends credence to everything Ride or Die would ever be. She says “Nothing could have been worse than just standing still doing nothing!”

Business startups must face risk. For me entrepreneurship is ride or die.

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2 Comments

  1. Banky

    June 8, 2017 at 5:17 pm

    Very insightful and thought provoking.

    • ReDahlia

      June 9, 2017 at 6:32 am

      Thank you Banky for reading. We are glad you enjoyed it.

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