Entrepreneurship by definition comes with risk so a prudent individual might want to ask the question; What is one way for an entrepreneur to decrease risk? It is a great question. To help us with that question we turn to the Theory of constraints in which there is an underlining assumption that inherent simplicity exists in complex systems. If we can find out what that is we can improve the system. In the case of entrepreneurship where would we look?
The Entrepreneur as An Individual Is the Risk
In short, the best place to look would be the mirror. You as the entrepreneur hold the keys to success or failure. You can decrease risk no matter what you are getting involved with if you make sure that you are the right person for the job.
Every entrepreneur has their own unique set of strengths and weaknesses. The entrepreneur that knows where they are strong/weak will do much better than the one that thinks they can do anything.
If you have ever watched Shark tank you may have noticed a phrase often used when backing out of a potential deal. They will often say; “its not for me”. It could be a great business, with good numbers, and little to no competition yet these serial entrepreneurs know immediately if it is something that they would be a good fit with.
Alignment Of the Entrepreneur and The Business
Alignment between an entrepreneur and the business is the greatest determinants to business success. If you think about it who is going to compete best in any given market? The person who loves that space or the person who hates it.
A good deal of intuition and understanding is required in every business venture and the people who love what they do tend to acquire the knowledge better than those that don’t care.
You have heard the expression; never trust a skinny chef.
This embodies the idea. If a person doesn’t love the food, why would they love to cook?
What Are the Risks Involved With Entrepreneurship?
In short you risk time and money when building enterprise.
Beyond that the risks to your business are so vast that if you aren’t dialed into your business, you will have no luck staying afloat. The purpose of a business is to make money now and in the future. That means that not only today but tomorrow you will need to field any number of curve balls as a business leader.
You risk losing time and money if you are not equipped to make your business thrive.
What About Market Conditions?
While they are something to consider market conditions are not the greatest thing you should worry about when you start. Out of the gate you want to make sure you are in the correct market for you, not what the particular considerations exist in any given market. No matter what market you pick there will be people both losing and making money. Its quite possible that the best market for you is one that is on a decline. If you are geared for a given space, you will find ways to add value an untimely make money.
How do I know If I am Aligned with a Market?
You know you are aligned with a market if it’s something that you would do all day for free.
This doesn’t mean everything that you would do for free is a good place to start a business. There must be a way for you to solve a problem and add value to others for the market to be commercially viable.
Here are some questions to help you out:
1.What do you do on the weekends?
2. What is something that you have done which was hard but you later really apricated?
3. What do people commonly ask for your help with.
All of these could be great seat questions to a market that you are aligned with.
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