Low risk, low reward/High risk, high reward: My recipe for success

I’ve learned throughout my personal life and professional career that hard work pays off. You need to put in the time, be open to change, and be committed to your craft (whatever that might look like to you). And most important, be true to yourself. If you follow this advice, chances are you’ll live a “satisfied” life.

However, most entrepreneurs I’ve come across (myself included) aren’t content with just a “satisfied” life. They want more. They want financial independence, they want the ability to better other people’s lives, they want to call the shots and, ultimately, they want to control their own destiny. Entrepreneurs are risk takers, and I’m no different. I believe the higher the risk, the higher the reward. However, before you make any high-risk decisions, I urge you to do your homework first.

The first thing you need to do is believe in yourself. Take a step back and look at yourself objectively. Have you been successful in your personal and professional life? Have you learned from past mistakes? Do you have the savviness and ability to overcome obstacles? Can you recover both emotionally and financially if the risk you’re taking doesn’t meet your expectations?

Ready to take a risk? Ask yourself these questions…

I always ask myself three questions before I make a high-risk decision:

  1. Based on my decision, what would be the worst-case scenario?
  2. What would be the best-case scenario?
  3. What would be the most likely scenario?

If I am at peace with the outcome of each scenario, then most likely I would make the decision to move forward. When buying my company, I stepped through the three questions:

  1. What would be the worst-case scenario? I would lose my life savings, be forced to get another job, and need to rebuild my savings account. I was ok with this possible outcome, because I knew I had a lot of experience and could get another job.
  2. What would be the best-case scenario? I would thrive at owning my own business, sell it for millions of dollars, and secure a nest egg for retirement. (Luckily, that’s how it turned out.)
  3. What would be the most-likely scenario? I would start my business, struggle early, and continue to chug along. Eventually, I would retire with a steady paycheck. I would be at peace with that decision as well.

Surround yourself with “Builders”

I believe most entrepreneurs are “Architects.” They have a vision for what they want their company to look like. They need to surround themselves with “Builders.” The Builders are the employees they hire to help them build out their company. While Builders take direction from the owner, these employees usually excel at the entrepreneur’s weaknesses. It’s vital that entrepreneurs build out a team they can trust and, ultimately, will help build out the company to the owner’s expectations. Meanwhile, you are creating a company that your employees are proud to work for – and proud to help build.

Build a great culture

Building culture is one of the entrepreneur’s most important responsibilities. It’s the vibe of your company. You need to hire talented employees you trust and can count on to help you build out your company – and build a vibrant, productive culture. It’s imperative that your employees believe in your vision, and it’s important to include them in decisions that help to shape your company.

Keep employees informed about the trials and tribulations of your company. Empower them to make sound business decisions and keep them abreast of the health of your business. Pay a competitive salary and reward your people when they go above and beyond the call of duty. Be creative with their compensation plan. Don’t be afraid to pay a commission on new business. If you’re making money, then your employees should be making money too.

Be a mentor

You owe it to your employees to help them grow. Take them outside of their comfort zone and ask them to take on additional responsibilities if you see that they’re ready for it. Get to know them personally. Learn about their families and hobbies. Take an interest in them. Take your time and push your employees to their limits. Reward them financially and with positive reinforcement. Extra time off goes a long way!

Know your employees’ limitations. Don’t put your employees into a demanding role if they’re not ready for it. Put them in a position where they will succeed. If they cannot keep up with the growth of your business, then let them go. Some companies I consult with have kept employees working there too long. It actually stunted their business growth. Trust me, most employees know when they are big contributors and when they are not. Nine out of ten times, it’s a relief to employees when they are let go, because they know they can’t keep up with the growth of the business.

Create a work environment where you and your employees are proud to come every day. Select an area that’s safe and close to restaurants. Promote work/life balance.

When you launch your business, keep it lean and mean

Be disciplined not to spend money foolishly. Spend money only on must-have items. The nice-to-have items will come in time. However, make sure you dedicate a part of your budget to marketing. It’s difficult to measure marketing success but, be rest assured, you need to market your business constantly. Utilize social media. It’s free to subscribe to LinkedIn, Facebook, Instagram, and Twitter. Be disciplined to constantly update your social media and engage with your customers and prospects.

It’s imperative to work off a budget and forecast

Create a budget to keep track of your expenses and expectations. Create a sales forecast you can use as a roadmap. Make sure both your budget and forecast are realistic and achievable. If not, revise them. You need to follow realistic metrics in order to hit your goals.

Communication is vital to a company

Have weekly or monthly meetings with your employees. Share with them the wins and losses of the company. Keep them apprised of all internal communications. Be careful not to schedule too many meetings – it will affect their productivity. Keep meetings to an hour or less. Evaluate your employees’ performance at least once a year. Employees want to know how they’re doing. You never want to blindside employees and fire them on performance when they had no idea there was even a performance issue.

Finally, have fun!