Having A Backup Plan

There’s this almost cult-like fascination with being an entrepreneur and for some people, they wear it like an idiotic badge of honour.  I don’t really subscribe to the idea of someone being an entrepreneur as I’ve said in a few previous emails – you can be entrepreneurial in nature, but defining yourself as an entrepreneur is a bit stupid.

The entrepreneur fanboy crowd have some pretty stupid memes and sayings that get tossed around when people talk about entrepreneurship now on the internet.  My favourite one today was talking about giving 120% every single day.  The person who said that shouldn’t be anywhere near a business because their math is horrific.

The one that I wanted to talk about today though is, “He jumped off a cliff and built an airplane on the way down.”

If there is a stupider saying then that when it comes to building a business, I’m fairly certain that I’ve not yet come across it.

And let’s not be mistaken, some pretty famous people have tossed that one out there – last year Sir Richard Branson, one of the poster boys of the entrepreneur fanboy club actually used it in the title of a blog.  Reid Hoffman, founder of LinkedIn was described in that way with relation to how he built LinkedIn.  I’ve lost count of the number of times Fast Company magazine has used that phrase to describe just about every startup founder that they feature on their cover with extreme close-ups and soft lighting.

It is a stupid saying and candidly really bad advice.

Normal humans with things like commitments, families and responsibilities can’t take stupid amounts of risk like that.  That’s fine for people who live in their Mom’s basement or can crash on their friend’s couch, but again, for normal humans, that’s just not a good way to operate.

I think for most people, you not only need to have a seriously well thought out strategy and execution plan, but you should also have a good backup plan.  You need to ask yourself, “What are you going to do if your great idea just doesn’t work?”

For some of you out there, this might be “too negative” and interfere with your desire to surround yourself only with positive energy, but realistically, you’re ridiculous.  Seriously, if you only want to think happy thoughts and visualise your success so that you can fully manifest it, you’re an idiot.  The world doesn’t work like that.

One of the reasons I’m such a huge proponent of people becoming Casual Marketers and building their own side hustle business or kitchen table business is because you’re totally mitigating your risks.  If your investment is your spare time and maybe a small bit of capital, then if you were to fail, you’ve not lost much.  Even better, if you’ve taken your shot while you’ve had a job, then your risk is offset even more so.

I’ve spent the majority of my adult life working in large enterprise and business and just about every single significant decision made is reviewed for risk with some form of contingency put in place should the idea not succeed.

You need to think like that.  You need to look at your idea and say, “Ok, how can I create this business in a way that will minimise the risks while not entirely stifling my opportunities to grow?  What do I need to have in place just in case it doesn’t work out the way I think it will?”

There are plenty of things you can do to have some contingencies in place like keeping your existing job, building up a bit of a financial runway and being VERY conservative with any and all estimates or budgets you create when you’re just starting out.  Having a bit of a “get out of jail” capital kicking around is a great thing as well so that if something goes wrong or you need to take a small risk, you have money set aside to drop.

Please don’t ever decide to build your business off your credit cards. That’s just such a terrible idea, I can’t express strongly enough how bad this is. You hear about these people who are now interwebz millionaires who were deep in debt using their credit cards to pay for everything, but the truth is, they’re either lying or they’re the fraction of the 1% who succeed like that. Most people just end up owing chunks of money at 20% interest and it strangling them and their business.

Here’s a pro-tip: in my business, we do pretty well and we use debit cards so that everything effectively runs off cash and we never end up in a hole to a bank. It’s just a simple way to avoid an unnecessary risk.

Think of running your business like jumping out of a plane, you need to make sure your parachute is properly secured and that you have a backup chute.  Taking risks is fine as long as you’re prepared and you have a good backup plan should anything go wrong.

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