January 3, 2014

Taking Calculated Risks

small business riskI posted this picture on the Small Food Business Instagram channel a few weeks ago.  What do you think of the caption?

"Strategizing.  All good entrepreneurship ventures should strike a certain amount of fear so you know you're pushing your boundaries."

“Strategizing. All good entrepreneurship ventures should strike a certain amount of fear so you know you’re pushing your boundaries.”

Walking that fine line between pushing yourself enough and not letting fear hold you back, but making sure you take smart, calculated risks, is the constant balancing act entrepreneurs face.   We have a saying in my household:

“Be willing to take calculated risks because great things can happen when you do.”

That doesn’t mean it makes it any less scary though!  What do you think?  Should some of your decisions and plans strike a little bit of fear in your heart or is that foolish?  Do you have any suggestions on how to overcome that fear and plow ahead?   Any big plans you have for 2014 that are both scary and exciting that you’re willing to share?

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7 comments on “Taking Calculated Risks

  • Thembi on said:

    I was listening to the radio yesterday as I was driving home and the DJ said if your dreams don’t scare just a little bit then they aren’t dreams. They are the reality you’re too lazy to do. Starting this next business is my dream and it scares me everyday. But that is exciting.

    • smallfoodbiz on said:

      That’s a great way to put it and I’m right there with you. I test to make sure I have a little bit of fear to make sure that I’m pushing myself far enough outside my comfort zone. Best of luck (to all of us!) in 2014! 🙂

  • obatsoepraba on said:

    I totally agree that risks calculated or not are scary. I’ve switched career paths twice and I’m only 25. Let me tell you that I probably analyzed each decision more times I can count yet I was always terrified if I didn’t reach my goals. Fortunately, I was able to reach every objective I set out when I switched careers. It’s been exhilarating so far. With that said all the planning and analysis can only do so much, because at the end of the day you need to take a leap of faith and hope for the best!

    Out of high school I wanted to be a mechanical engineer but I opted out of engineering school to become an automotive technician. Then I left my dealer position to go back to school and thankfully I got into my dream school at Cal. Now I am trying to use my knowledge in International Development and my passion in sustainable agriculture to start sometime of social entrepreneurship endeavor that addresses food access, poverty and education in Indonesia. The goal is exciting but unlike my previous effort, starting a business seems to have more variables. Praying that my research and planning will be sufficient once I acquire enough capital and work experience. Thanks for writing your blog. You have lots of interesting posts that are helpful for an late-blooming-but-aspiring small business owner.

    • smallfoodbiz on said:

      I often say that late-blooming entrepreneurs are powerful entrepreneurs because of the wealth of expertise and experience they bring with them into their new venture. Doesn’t even have to be a necessarily related industry because a lot of what you learned elsewhere with regards to business will definitely carry over. Best of luck in your venture – you’re tackling a tough but much-needed issue. I’d love to hear how you’re doing down the road so please keep in touch!

  • Rebecca on said:

    I just met with my book keeper and came face to face with the difficulties in creating a artisan food company that is profitable. River Wave Foods was incorporated in 2006 and in the last 7 + has developed from a local farmer’s market product to availability at Whole Foods Markets and other fine grocery stores in the Pacific Northwest. As Sylvia, my book keeper, and I looked at the numbers what became painfully obvious is the fact that the costs of production, marketing and building the River Wave Foods brand does not balance out with the sales numbers. If the equation were as simple as The Selling price of product “A”- “B” the cost of production = “C” (hopefully a profit) financial success would be within our grasp but the equation gets all wonky when figuring in store demos and all the other expenses of developing brand recognition. RWF does some internet sales and direct sales but cannot pull itself over the hump of profit slashing marketing costs. Is it a pipe dream to think that a small entrepreneurial food company can be profitable, it seems that most of the small food business owners I know hang their dream on being bought out by one of the larger players. My question to all the food entrepreneurs out there is: can a small regional food business be self sustainable?

    • Jennifer on said:

      That’s a great question and I’m sorry you’re struggling. Personally, I think the answer depends on a few things.
      1. What is the end goal of the business owner? It’s very possible to create a great lifestyle food business in the industry. It’s harder (but not impossible – takes much more money) to create a brand that will get bought for millions of dollars.
      2. Does the company have a strong marketing strategy? Many times food businesses underestimate how much time and money it will take to build their audience, as you mentioned. There can be a bit of a ‘I have a great product so people will love it’ mentality but the truth is that entrepreneurs still have to let people know they exist and to do that takes marketing dollars. Many an entrepreneur doesn’t give themselves enough margin in their product pricing in order to account for the amount of marketing that they must do. Or their marketing strategy consists of ‘I’ll post on Facebook when I have time’ which isn’t a strategy at all. I’ve seen entrepreneurs get excited that they’re being picked up by stores but then not put any focus on how they’re going to get consumers at those stores to purchase their products. All of that takes a very strong marketing strategy. (Not at all saying you don’t have a strong marketing strategy – just pointing out what I often see).

      • Rebecca on said:

        Hi Jennifer,
        Your comments and insights are spot on. And yes, assessing marketing strategy is paramount to the growth of a business, particularly a food business. So my challenge is to grow sales without an increase in marketing costs. In retrospect, I think that if i could have formed the company with 5-8 partners with a commitment to the same vision and were willing to go out and market it would have made growth much easier.

        I thank you for taking the time to write. From your suggestions and comments I can tell that you have met others who have experience the same challenge. I appreciate being heard and welcome other small artisan food entrepreneurs to share their experience. Perhaps there is a solution out there.