Entrepreneurs Love Risk?

This myth seems to emanate from the media portrayals of entrepreneurs, likening them to old gun slinging, sneering, arrogant cowboys just looking to find and attack risk. My experiences and those of most successful entrepreneurs I’ve met indicate the exact opposite: small business owners with their own money on the line look to minimize, avoid, share, or make risk disappear.

Every time I think of this topic, I’m reminded of Professor Howard Stevenson’s remarks on the subject, essentially saying, “have you ever met an Entrepreneur who wakes up in the morning, bounces out of bed, and says, ‘What a great day! Where can I find risk?’”

I think risk, like beauty, is in the eye of the beholder. By that I mean that risk looks and is different when viewed by an outsider and an insider. An insider is one with good general business experience, and specific industry expertise. This person does not perceive certain risks because he/she knows their way around the risk minefields that the outsider cannot see. Successful business people do their homework to understand given situations. The more knowledge they bring to bear on a situation, the less risky it is. It’s a little bit like throwing more wood on the camp fire: more and more space around the periphery gets illuminated, and it becomes clear that –at least as far as you can see—there really aren’t any wild animals out there. I like Gourmet Coffee marketer Dennis Boyer’s take on this subject. He says, “I think entrepreneurs have a talent for capitalizing on opportunities that have a lot of perceived risk, but because his math is a little more insightful, those risks aren’t quite the same as those for those who see the situation from the outside.”

That is not to say that there are no business risks out there. Of course there are, but the smart businessperson seeks to identify and understand the risks inherent in a given situation. If the risks are too big and can’t be managed, and the risk/reward ratio is out of line, the good entrepreneur will most often walk away.

I also think many business owners do not delineate between Risk to the Business and Risk to One’s Ego. Risks to the business and the assets behind it are real and should be scrutinized with concern. By Risks to your Ego, I mean fear of being rejected by a potential buyer, loan officer, licensor, or whatever. Those should not be confused with Risk to the Business.

A rejection is not a failure. It should be viewed as an opportunity to learn. Successful entrepreneurs have the self-confidence to face all these ego risks and to put their energies into reducing or avoiding risks to the business.

Listening Is Different Than Hearing

Why is it that in most business and social encounters the mouth is employed much more than your two ears? Many people think they are listening when they are just hearing. If your ears are healthy, hearing is an automatic anatomical response to sound in your vicinity. It takes no effort or skill.

 

On the other hand, good listening, which uses the same two ears as hearing, takes focus and is a skill that can be learned. The most common mistake in good listening is that while someone is talking, you are thinking about what you are going to say. The consequences of that is the other party quickly realizes you weren’t listening to them, as your remarks did not take into account what you should have just heard. Not exactly a confidence builder.

 

How many times have you been introduced to someone and almost immediately forgotten their name? You didn’t forget. You just didn’t really hear it.

 

This listening thing is a big deal. It affects all phases of your business and personal life. In my opinion, it is the key component of successful selling. If you ask good questions and then really listen, most buyers will eventually tell you how to sell them. Silence many times is your best friend. Successful negotiators are good listeners. They learn what’s really important to the other party through good listening. They can then speak to address their concerns and priorities.

Good listening is a major trust builder. People want to know that their opinions are being heard. They will have confidence and trust in people who listen to their point of view, even if they don’t share it. This applies to your employees, peers, customers, suppliers, family members, and all earthlings you meet.

 

Understand that humans process ideas faster than they can be delivered verbally. This makes it easy for your mind to wander when listening. Patience is required to focus.

 

Good listening will improve your relationships at home. Don’t come home and bring all your problems to the dinner table if you aren’t willing to listen to everyone else’s concerns and activities.

 

There is an abundance of books and videos available on the subject. However, just being aware of the situation will make you a better listener. You can always improve on this skill.

 

I strongly believe listening is a life skill that should be a mandatory course beginning in high school.

 

Curiosity – A Key Entrepreneurial Trait

Most of us will agree that creativity is a key element in a company’s growth and sustainability. This applies to small and large companies, start-ups, and service or product companies. Without creativity, you are susceptible to becoming a me-too company, which will lead to lower profit margins, loss of market share, and eventual demise in today’s fast moving entrepreneurial world.

So, the big trick is knowing how to foster the maximum creativity in everyone in the company. One of the most important ways is to have curious people in the firm. You want people who ask a lot of questions-not gossip questions. They should ask how questions. How do we know if our ads work? Who buys our products? How do we stack up against our competition? How can we improve, etc.

You want a diversity of curious people, who may disagree with each other but always in a civil tone without politics in play.

This curiosity element should begin in the hiring process. Look for curious people and think of questions to ask them. Do they know what is going on in the world? What do they read? How much do they know about  your company or industry? Etc.

You, as the Small Business owner, need to have a high patience level to listen to all these questions. Many will seem silly or a waste of time to you. You can’t say that is a stupid question because that will halt the flow of questions, and there goes your creative environment. This could be difficult for you as many action-oriented entrepreneurs are short of patience.

Curious people are also much more apt to always be learning. They are not complacent with their current knowledge level. Continuous learning is a lifelong process and should be encouraged. It will pay off in your business and employee retention.

This patience with questions carries over to your home life, particularly with kids. Their barrage of questions can be annoying at times. However, that is how they learn. Your patience will help the process.

10 Tips to Build Better Trust in your Business

Trust Builds Confidence

 

The single most important thing you can do in starting and building a business is to get people to trust you. Trust needs to be earned and takes time, although you can lose it in a second. Telling people to trust you doesn’t cut it. In fact, when people I just meet tell me to trust them, my antennae is up to watch my back.

 

The benefits of being trusted are enormous. People have confidence in those they trust. Confidence leads to wanting to do business with you. Employees want to work for trustworthy bosses and are more highly motivated when they do. Customers are more likely to write orders for sales people they trust. Investors and lenders will not write the check to anyone they suspect is not high on the trustworthy ladder. A great deal of their due diligence is in finding out your trust score. And in my opinion, the most important thing about being trusted is that you live a better life. The only way to teach your children about trust is to set the example for them.

 

You should always do the right thing. Most people know right from wrong but are compromised when money is at stake. Many people differ on what is right or wrong in a business situation. It takes lots of little things and time to build trust. Some people never even think about it as they instinctively do the right thing. Here are 10 specific trust building ideas to get you thinking in the right direction. There are many, many more.

 

10 Tips to Build Better Trust in your Business

 

1.  Listen to people you deal with.

2.  Admit mistakes right away.

3.  Pay bills on time. If you can’t, call and tell why and when you will pay. Give a date

you can meet or beat.

4.  Acknowledge what you don’t know. Don’t BS.

5.  Don’t duck or procrastinate dealing with a problem.

6.  Demand quality.

7.  Don’t over promise.

8.  Move quickly to correct mistakes no matter the cost.

9.  Keep your promises.

10.  Never betray confidential information.

 

Bootstrapping 101 lists 38 trust building ideas.

 

Also, remember trust is portable. Wherever you go, it follows you: good or bad.

 

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