The Changing Riskiness of Risk

How risky is it to give up your current job and follow a dream or passion you’ve been longing for?

It really depends on the person. See, I’ve recently realised that for some people a ‘risk’ is not really that risky. For example, a parachute jump is more risky for someone doing it alone for the first time, than for someone who has done it thousands of times.

I was watching Dragon’s Den and on it were 2 girls of the ‘Made in Chelsea’ variety, who had started a fairly successful men’s clothing business together. Very impressive, considering they seemed quite young and this was obviously their first business. I wondered why I hadn’t yet made any forage into my own business.

It wasn’t for lack of ideas – I’ve had a few.

It wasn’t through lack of connections – I have known the people I’ve needed to follow through with my ideas.

It wasn’t because I didn’t have the funding – I could have got a loan and one of my ideas didn’t even have any start up costs.

The only, real reason was lack of courage. I wasn’t ballsy enough to drop my job and go out setting up my own business. I didn’t even try. I didn’t even get as far as looking into the viability of my ideas. There was just a complete hole where my self- confidence should have been.

But why? Why is setting up a business possible for some people more than others?  I came to the conclusion that it’s easier if you can afford to lose, or, conversely, if you have nothing to lose.

Those 2 girls on Dragon’s Den could afford to lose money. They’d be picked up by their parents and trust funds and they could start again. Or they could phone one of their successful relatives for a job in their companies. There were ways out for them. Just like Jamie in ‘Made in Chelsea’ and his 6 storey sweet shop. It’s an affordable risk for him. He can afford to fail.

On the other hand, there’s those that have nothing to lose. How many stories are there of people who succeed in life having come from nothing? They start in a really lowly job, living in a cupboard, and they end up as CEO of a conglomerate corporation. At the start they had nothing to lose! They were already at the bottom of the ladder. So they had that opportunity to take risks and learnt from the start how to ask for jobs, be ballsy, and take risks.

So what does this mean for people like us? People who are in good jobs, have mortgages, a comfortable lifestyle already, who have a lot to lose?  Are we less likely to make that risk?

I’d be interested in finding out the figures from start ups to see how many people left well paid jobs.  And how many had mortgages, family or other responsibilities.  I’m guessing only a few!

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2 Comments Add yours

  1. R says:

    Um…. Our dad? 🙂

    Like

  2. Dad says:

    There are probably more than you think. As “R” pointed out, there’s one right here! My advice to anyone thinking of doing this would be as follows:
    1. Make sure you have 100% support from your partner. You will want your partner committed through any stresses or fall-out.
    2. Do not get a bank loan. Ideally, find someone with money (and experience) to take a part-equity stake. Failing that get a further advance on your mortgage.
    3. Do not borrow more than one year’s salary. If it’s going to cost more than that to set up, it’s too big for you alone. You need to get partners into your venture.
    4. Have a safe exit plan should the venture fail. I saved six months’ salary before starting. My plan was that half of that would tide me through a lull in business and, if that continued, the remainder would tide me through a job search!

    Like

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