Entrepreneurs need to embrace risk, not money, to achieve success.

The extreme responsibility of ownership is the hallmark of entrepreneurship and its greatest barrier to entry. Although each of us wants to see revenue created from our ideas, it’s important to understand that sales are an outcome — not the focus — of our efforts.

In 2010, I sold my second successful business to new owners that were obsessed with cutting costs — even though many of those “costs” were revenue generating. Efficiency is important, but investment requires risk for reward. The “wealth preservation” mentality that we learn in personal finance can lead to our demise in an open market. Instead, we need to focus on embracing uncertainty to succeed.

At a certain level business is all about spending money to make money. You spend $100,000 in marketing to make $500,000 in sales. Looking at a business from the sole angle of cutting costs, is a sure fire way to go out of business. Cost cutting is important, but not nearly as important as generating revenue, and bringing in sales.

I’ve had numerous “financial experts” look at my various businesses and say “You're spending way too much on marketing.” The problem was these experts weren’t business owners, they weren’t entrepreneurs. These experts spent their careers crunching numbers, looking at averages, evaluating “models”, but they were never behind the driver seat. 

Security is an Illusion

    People ask me if I’m worried about my future as an entrepreneur. I ask them how much control they have over their own employment. Would you keep your job if your company was acquired? Would you survive if your boss wanted you out?

Entrepreneurs suffer no delusion. We face the reality of an uncertain future every day. It’s our responsibility to generate revenue and create vision — or else we pay the price. Instead of viewing uncertainty as a risk to be minimized, look at the future as a place of opportunity.

Has anyone achieved anything by sitting safely at home and watching TV?

Greatness is achieved by conquering fear, not being controlled by it.

Have a Growth Mindset

    Entrepreneurs face unique challenges, and creating a startup can be intimidating. If you’re afraid to invest in yourself, your enterprise, or your staff, you need to reconsider your profession. If you want a safe routine, you may want a day job instead.

    Entrepreneurs need to pivot when necessary and rapidly shift strategy or tactics to adapt. Starting a business is like growing up as a child — you’re bound to get scrapes and bruises, but it’s getting up that counts.

    Your attitude plays a huge role. “Problems” are just setbacks. “Obstacles” are just challenges to overcome. “Failures” are lessons — hard fought and earned. In education, this is called a growth mindset — I call it grit.

Courage

    Entrepreneurship requires courage. Once you have a model that works, you need to have the courage to spend $5,000 a day, $10,000 a day,or $100,000 a day.  This isn’t easy for a lot of people, they get stuck feeling comfortable. As an employee, you can show up, do the bare minimum, and receive the “effort ribbon” known as a paycheck. As an employee your risks are minimal, but therefore so are your rewards. As a business owner, you are solely responsible for the success and well-being of yourself and others.

    If this makes you uncomfortable, that’s OK. If that discomfort hinders your creativity and hinders progress, then you need to move on. If entrepreneurship was safe and easy, everyone would open a business and become billionaires by tomorrow. Entrepreneurship may require every ounce of cunning and fortitude you have, but your achievements will be uniquely yours.

Conclusion

 Ultimately, determination and courage will be the cornerstones of your success. Finance and economics have their place in business, but even if you’re starting an accounting firm you will need much more. Learn from your experiences in the past and see the future as a place of uncertainty — and opportunity — you create.