What is one way for an entrepreneur to decrease risk?
Getting out there and starting your own business takes guts. There is inherent risk involved with entrepreneurship, but the risk can be minimized by your method. It’s about pinning down the things that you can control, and being clear-eyed about the things you can’t while methodically increasing your knowledge and understanding of (and, therefore, your influence over) the situation at hand.
As you start and run your business, follow the PEARL method. PEARL stands for Plan, Execute, Assess, Reflect, and Learn.
Do your due diligence. As you gear up to start or make a big decision for your business, do your research ahead of time. We have so many sources of information, there is no need to reinvent the wheel from scratch. Another key part of planning is developing a way to measure your success. Whatever you’re about to do, make sure you set yourself up with metrics so you can see if it’s working. Lastly, be sure you’re connecting with other business owners as well. Talking through big decisions with other people who ‘get it’ is a great way to hash out the details and think through the possible pitfalls of any next step.
At some point, you just have to make a move. Once you feel you’ve gotten as much information as you can to weigh your options and make an informed decision, decide! Move forward with your plan and embrace that top-of-the-roller coaster feeling of “here we go….”
And remember as you speed along to manage your metrics. Your sales data, your bookkeeping, and any other numbers that will allow you to review the impact of your strategy are necessary to maintain.
Now you’ve implemented your plan and things are clicking along. How’s it going? Time to review your data. Get curious. Look over sales trends, spending trends, and notice any patterns that are emerging. Maybe sales are through the roof. Maybe so are costs. Maybe traffic is up but average transaction amounts is down. Maybe costs are down but your customer reviews have taken a turn toward the negative. It’s not time to be judgemental of yourself one way or the other. At this stage, you’re Spock. Unemotional, looking over what IS.
Now that you’ve noted the patterns cropping up in your data, what is your takeaway? Are they the patterns you need to see in your business? Or are things going in a direction you’re unsatisfied with? If your outcomes are exactly what you anticipated or better, great! Keep doing what you’re doing. If your outcomes are not what you hoped, great! You’re learning something that can help you minimize risk in the future.
Now that you’ve planned, executed, assessed, and reflected, it’s time to take the information you’ve gained and apply it to your next move. Don’t waste this invaluable experience by breezing past its lessons. Your unique experience and the knowledge you just gained through this process is what sets you and your business apart! Now you can repeat the process from an even better vantage point, and your success this time around is that much more assured.
Risk cannot be completely eliminated for any entrepreneur, but by taking a PEARL approach, you can minimize it every step of the way.