Calculated Risk

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Calculated Risks

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Definitions

• Calculated Risk
• A risk that has been given thoughtful
  consideration and for which the potential costs
  and potential benefits have been weighed and
  considered.
• Dedication
• Selfless devotion to a purpose, cause or project.
• Feedback
• A reaction or response to a particular process or
  activity.
• Perseverance
• Steadily pursuing a course of action or a purpose
  in spite of difficulties, obstacles, or
  discouragement.
• Reward
• Benefit resulting from some event or action.
• Risk
• Exposure to a chance of loss or damage.

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Time Risk

• It is suggested that you minimize the financial
  risk when starting a business venture. However
• take time risk
• Time risk is when you put time and effort into a
  business and risk losing that time that you
  invested if the business doesnt go as planned.
• The good thing about time risk is that you
  often gain valuable skills.

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There is no failure, only feedback.

• If youre getting feedback that something youre
  doing isnt working, that isnt failure, thats
  valuable information that you should look at as a
  learning experience.
• The only failure would come from not listening to
  and learning from any and all feedback that you
  receive.
• The less risk you are willing to take, the less
  chance you have of being successful.
• If you aim at nothing, you will hit it therefore
  if you want a chance at realizing your dreams,
  you will actually have to reach for them.

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Keys to being a Successful Risk Taker

• Dont be too critical
• Perfectionism has its place, but if you
  consistently wait to take any risks until you
  feel like all the pieces are in place, then
  youll never get anywhere because its up to you
  to put the pieces of the puzzle together as you
  go.
• Dont give in to fear
• Fear is a very real thing, but it should never
  have a place in your decision-making as fear can
  give you false signals that keep you from taking
  any risks at all.
• Go for it
• Look around at other successful people and think
  about the risks they took to become successful.
• Like them, you must be willing to do whatever it
  takes to make your business work.

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Risk Takers

• Anytime you take a risk there is a chance of
  failure.
• The difference between successful and
  unsuccessful people is how they deal with failure
  and mistakes.
• Successful people look at mistakes and missteps
  as learning experiences, and they take
• them as opportunities to grow and evolve. If you
  keep making the same mistakes over and over, or
  if your instinct is to just give up, then you
  will never achieve success.
• It is easy to get discouraged, to fear rejection,
  and focus on negatives, especially if the people
  around you dont share your vision, but it is up
  to you to decide if you would rather be a talker
  or a doer.
• The future is unknown therefore by definition it
  is risky, but you can reduce your fear and your
  chances of failure by learning to take calculated
  risks.

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Risk Takers Cont

• People told the Wright brothers that human flight
  was impossible but now you can get from New York
  to London in about eight hours.
• Prior to the popularity of the fax machine in the
  1980s, most people would never have dreamt that
  you could instantly transport a copy of a
  document from one place to another.
• Alexander Graham Bell probably never imagined
  being able to drive down the road while talking
  on the phone.
• Never let anyone tell you that you cant do
  something because you can do anything you set
  your mind to when you have vision and
  determination.

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Business Plan

• Business Plan
• A summary of how a business owner, manager, or
  entrepreneur intends to organize an
  entrepreneurial endeavor and implement activities
  necessary for the venture to succeed.
• Market Research
• An organized effort to gather information about
  markets or customers.
• Marketing Plan
• A written document that details the necessary
  steps to achieve one or more marketing objectives
  for a product or service, a brand, or a product
  line.
• Strategic Plan
• A written document that describes an
  organizations short, mid and long-term goals or
  objectives, and priority actions to take.
• Strategic Planning
• A organizations process of defining its
  strategy, or direction, and making decisions on
  allocating its resources to pursue this strategy.

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Action Steps for Starting or Growing Your
Business

• Conduct market research
• Develop some financial projections and a timeline
  for your business
• Identify what you need to get started
• Using the outline provided, write up a business
  plan for your venture
• Develop a marketing plan

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Action Steps for Starting or Growing Your
Business Cont...

• Participate in seminars, trade shows, and classes
  that would be beneficial for your business
• Review your progress each week
• Update and revise your goals, strategies and
  business plan as needed
• Keep it simple pick 23 tasks to complete each
  day
• Stay focused!

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Market Research

• Analyzing the market and the competition for your
  products is one of the most critical elements of
  creating a marketing plan.
• Market research can provide you with alternative
  approaches to the market, help you develop short
  and mid-term goals, and allow for more accurate
  profit estimates
• Once they have a product or service, market
  research is the next step so that you can
  determine whether there is a market, how
  profitable the market could be, and what your
  position is within that market.

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Conducting Market Research

• Is my product or service constantly in demand?
• Can I create demand for my product or service?
• Is there much competition for my product or
  service?
• Can I compete effectively in terms of quality,
  price and delivery?
• Can my product or service be priced to support
  projected profits?

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What you should know about your market

• Whether there is constant or seasonal demand for
  your products or services, how much competition
  there is, and whether current market prices will
  give you the profits you need to meet your goals.
• Once all of the questions have been answered, the
  company will be better able to perform the
  necessary market research and prepared to use the
  information you gather to increase your profit
  potential.
• Keep the data collection and analysis process
  organized, you should maintain a notebook or a
  folder of data and information on your computer,
  so that you can organize and refer back to the
  information as needed.

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Do the research necessary to answer the following
questions

• Who are my customers and where are they located?
• What need could I fill for my customers?
• Is my product or service affordable?
• Is my market growing or declining?
• What is the economy like in my product or service
  area?
• Market data research doesnt have to be
  difficult, time consuming or expensive.

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Information Sources

• Trade associations and journals
• Regional planning organizations
• Chambers of Commerce
• Local banks and Realtors
• U.S. Government publications
• Customer surveys

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Parts of a Business Plan

• Executive Summary
• This is a summary of the key elements of your
  plan. It is basically like an introductory
  paragraph of a long book report. It summarizes
  the key points of the plan.
• Company Summary
• This gives you clarity on what your business is
  about, your history and where you want to go.
• Products and Services
• This is what your business will generate revenue.
• Market Analysis Summary
• Explain who your customers may be and who your
  competitors are. This also covers the packaging,
  pricing and how you will get the message out.

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Parts of a Business PlanCont...

• Web Plan Summary
• Explain how you will use the web to enhance your
  business.
• Management Team
• Explain how the business will be run and who the
  members will be.
• Financial Analysis
• This is the budget for your business. It tells
  how much to start it and how much to run it.

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Costs

• Start-up costs
• These include any supplies or equipment needs,
  initial marketing costs, and other expenses you
  will face before you sell to your first customer.
• It is important to keep your start-up costs
  minimal, as it is a learning experience to run
  your own company.
• Operating costs
• These are the day-to-day expenses of running your
  business

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