Don’t take crazy risks


“Jump off the cliff and build wings on the way down,” is advice from fools for fools.

Only suckers and scions take unmitigated risk.

If you’re a sucker, sorry for you. If you’re a scion (rich parents, rich spouse), well done for winning the lottery and having a safety net.

Most people don’t have a safety net. Which means most people need to be planning very carefully to mitigate their risks when embarking on an entrepreneurial journey.

Remember Warren Buffett’s golden rules:

Rule 1: Never lose money.

Rule 2: Never forget rule 1.

Before starting a business, make sure you have a deal in place which covers your downside.

That sounds a tad difficult. How on earth are you supposed to ensure that when you flip a coin, heads: you win, tails: someone else loses?

No one said being an entrepreneur is easy. True magic only happens when you’ve mastered the art of creative thinking. Of innovating. Of deal-making. Of ensuring you have a safety net before you take the plunge.

An entrepreneur figures out a way to mitigate his downside, so even if the upside doesn’t materialize, he isn’t left as a red splat on the pavement.

Next time someone tells you to risk everything, add him to the list of people to ignore.

Sign up for Daily Blog

Enter your email address to subscribe to this daily blog.