Every business that's been created was built by the entrepreneur taking some sort of risk. Some risks are obvious, such as taking out a large loan from a family member. Others are more subtle and harder to recognize as they're happening.
As an entrepreneur, you may be taking risks right now that you don't even realize. To help you recognize and prepare for those risks, eight members of Young Entrepreneur Council described some of the risks they unknowingly took when they first started their business journeys and how their experiences have shaped where they are today.
1. Partnering With A Friend
With my IT startup, the first lesson I learned was the amount of risk involved in launching a business with a partner who was a close friend and who was at a different point in life. As friends, we got along very well, but as business partners, we completely disagreed on the philosophies of running a business and the risk tolerance of investing our startup funds. Fortunately, we both understood the differences in our administration styles and mutually agreed to allow me to be the sole partner and decision-maker in the business. I am a firm believer that if a partner is involved in starting a business, someone should be the majority leader in case a situation arises where there is a disagreement. This will avoid stalemates and the business can move forward. Mistakes are infinitely valuable. - Michael Garrido, E-Valve Technologies
2. Relying On Others
One key risk I was not aware of was just how much I would need to rely on other people for make-or-break success! With my first business (an in-person skincare clinic), I was completely in charge of everything and that's why it went so well. My second business, CLEARSTEM Skincare, is e-commerce, which means it's a tech company that requires developers, SEO people, PR people, user experience experts, e-mail wizards, advertising people who know how to segment cohorts, multiple logistics partners and 10 other roles that are all extremely important to the business's success. A founder of any e-commerce brand needs to be aware that they will need a designated team of experts in their roles to make this thing work. The "lone wolf" types need to prepare for a major shift! - Danielle Gronich, CLEARSTEM Skincare
3. Succeeding Too Quickly
The risk that you should be aware of is that your business could be successful—maybe even more successful than you envisioned—and it could happen a lot faster than you think. New entrepreneurs don’t always think about the fact that they could succeed. They are living within the day-to-day fear of just hoping to pay their bills. But the risk (uncertainty) that success will soon replace failure as your main challenge can really throw you for a loop when you haven't prepared mentally for it. "Proceed as if success is inevitable" is the best way to counterbalance this risk. - Daniel Lucas, Credo CFOs and CPAs / CVG Advisors
4. Having Less Time For Self-Care
When I started Blue Corona, I was 31 years old. Around the same time, my wife had given birth to our first child. Between the baby and the business, sleepless nights were the norm. I frequently arrived at the office before sunrise and didn't leave until long after dark. My time devoted to exercise dropped to zero. My diet went to hell in a handbasket. While I felt bulletproof at the time, it wasn't until many years later that I started to better appreciate the health risks I took. If I had to do it all over again, I would have made exercise and healthy eating nonnegotiable; after all, you can't enjoy your wealth if you don't have your health! - Ben Landers, Blue Corona
5. Managing Your Own Health Insurance
As a corporate employee, I never had to worry about how much health insurance could impact cash flow. Paying for insurance as a small business owner is expensive and can be especially challenging if you or someone in your family has ongoing health conditions. Navigating insurance plans, finding doctors and keeping up with the premiums are all things you want to consider and plan for when you're going out on your own so you're not caught by surprise. In my case, we have to set aside $30K per year as a family of three to cover health insurance. - Amber Anderson, Tote and Pears
6. Hiring The Wrong Team
A company’s DNA is set by the founders, and you need to choose the people whom you work with carefully. Work with people you love, respect and can’t live without. It is not the work we remember with fondness, but the camaraderie, the group that came together to get things done. Hiring the wrong people can cost you time and waste money that you can't afford to waste. Choose your startup team wisely and invest in people whom you would build multiple startups with, not just those you would work with to achieve your immediate goals. - Ryan Stoner, Dendro
7. Going At It Alone
I took the risk of not having enough advisors around me. I thought I would figure out most of it over time. I did this to avoid the cost of hiring advisors, but later on, I realized it was a mistake. I ended up paying more in terms of wrong decisions and time lost. We entrepreneurs all have the attitude of go-getters, but you shouldn’t take the risk of figuring out everything yourself. It is better to bring in external advisors at a price and learn from the advice. You may still fail with paid advisors, but that also would be a good data set for you. - Piyush Jain, Simpalm
8. Letting The Business Take Over
Letting your business devour your life is a big risk and a common pitfall for entrepreneurs and owners. I find that all entrepreneurs struggle to find distance, perspective and objectivity when they're plunged into the battle of their business. I made a very conscious decision to delegate, learn to trust my people and step back from my business to grow in my personal life when I was younger. I still carry the valuable lessons that time of life taught me. - Tyler Bray, TK Trailer Parts
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