February 13th 2007 Posted at Entrepreneurship
Comments Off on Making Mistakes
One the key advantages an entrepreneur has over a large corporation is the mistake department. I don’t mean not making them, I mean in making them. Most corporations are structured around the principle of mistake avoidance. But to be frank mistakes are the lifeblood of entrepreneurs because they are typically the hallmark of risk taking. Entrepreneurs are risk takers by nature.
In fact they are the obverse of the risk avoiding corporation. For the entrepreneur managing their risk taking behavior is essential to their success. Risk too much and you loose it all. Risk too little and you won’t reap the same rewards. How can you manage your risk/reward? Well here’s my pointers
- Understand how much you can afford to lose. Most entrepreneurs drastically underestimate the amount of time it takes for a new product to begin to be adapted. They assume as they typically are consumers of their own product, that everyone is going to love it. Even fads that have taken off like rockets needed much seeding and grass roots marketing efforts. Your initial budget is going to be short. You should be realistic about the amount of effort something is going to take to bring to market.
- Have clear metrics in your business plan. A business plan doesn’t need to long and incredibly detailed but it does require clear metrics for success or failure broken out quarterly. These milestones will let you know how you are doing along the way. You can revisit these metrics along the way but you need to measure success or failure.
- Face it. Many ideas fail because of a lack of funding. Be prepared to work two jobs if you are self-funding.
It’s not easy. Nor is always successful but being a entrepreneur means you need to very in touch with your business and make the adjustments accordingly.
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