But, I guess you've heard - freedom ain't free. To the new business owner I offer some advice concerning risk.
Business is a constant reminder that everything costs either money or labor and it's not the obvious things that will kill you. It's the unknown monster that eats up both.
I'm assuming we all know what costs are involved in our businesses. Buy a widget wholesale then mark it up to retail. That cost is pretty easy to figure. Then you have rent, utilities, wages, taxes, advertising, etc. All relatively simple costs to tabulate. These are easily known.
But wait, now you have to factor some sort of cost figure for risk. This is hard to do. You have to guess what could happen to trip you up. A fire? Storm? Market collapse? Loss of key employee or distributorship? We all have varying levels of risk tolerance. I have never been able to tolerate huge risks. So I take lots of small ones. I would rather fight small monsters with a rock and a stick than giant monsters with a cannon.
It seems to me that my business has been a series of baby steps because of those unknown monstrosities. I admit, I don't know if this is the best way to go or not. Those baby steps may be why I'm not the next Bill Gates. I don't know if he took baby steps but I like to imagine he did. In my case it was a way to handle risk. I mean, why stick your head out during a hail storm when you can stick out a finger. In a worse case, like a really big bowling ball size chunk of falling hail, which part of yourself would you rather lose? At least I would be alive to try another day. I mean, I would have 9 fingers left. I honestly expect wisdom to cost me something so winding up with only 9 fingers is acceptable.
But what about those circumstances you can't plan for? The ones that stick their heads up like a tyrannosaurus rex over the trees tops. He sees you. You can fight, hide, or run. All three decisions could be the right one.
If you don't remember any more than this, please remember you will always be at risk and something will always be threatening you. When you own your own business the T Rex shows up when you least expect it.. You simply can't begin to foresee all the monsters that will threaten you.
I was once sued by a county law firm for not paying property taxes on the property NEXT door. It wasn't my property and never had been. However, they didn't care and only wanted payment. They filed a lien on the property I was currently on. My taxes were paid up. I had to secure a lawyer as they really wouldn't talk to me and the court date was approaching. We settled it through him and they disappeared leaving me feeling fully justified in thinking monsters really are out to get me!
Another time we lost our water. It simply went off. We called the water company and got an answering machine. Seven days later, innumerable phone calls, walking every inch of our property and the adjacent property, we found an old house that a man was repairing. He found a valve up under his house and had simply turned it off. Not knowing it was the main line to our building. The water company didn't know this either. Being devoid of water for a week meant bathroom usage was questionable. We had to haul water in 5 gal buckets from the ditch out at the street to flush the commodes in the building.
One morning I came onto the property and only one of my working dogs came to the gate. I keep dogs mainly to just bark a lot. I believe they have been the primary reason I haven't been broken into over the years. The only insurance I've ever had that greeted me at the gate and I truly loved.
I looked around and figured he must have dug out somewhere and hopefully somebody would call me to come get him. All my dogs are tagged. One of my employees said he found him underneath a shipping container. Somehow this german shepherd had gotten frightened during a night time rainstorm and decided to seek shelter under a 20' steel container. He had dug under it until he was stuck midway. He couldn't back up or turn around. We got a couple shovels and started tunneling under the middle of the structure. We dug down about 2 feet and then under about 4 feet till I had to dig basically with my hands since I was afraid I would hurt the dog with the shovel blade. We also jacked the container up with a car jack just enough to accomplish all this. We finished about noon and my dog Jake scrabbled out covered in mud and shaking. Needless to say he was delighted to see us and promptly went to sleep under my desk in the office.
My point with these stories is they have NOTHING to do with the normal course of business. They are the monsters of risk that just inexplicably show up. All teeth and roaring. You can't ignore them as they may do away with you. So how can you prepare for things like this?
If you are expecting a hard and fast answer, well, I don't have it. Insurance helps. A wealthy family to go crying to would work also. But I mainly keep a cash back up. I've found that when things go wrong, really wrong, and you need money, it's very hard to come by. I stopped letting myself get to that point. A banker who wouldn't loan me a dime taught me this.
This may not be the best way to do things. I mean, it really may be the hard way. That's the way I learned this much of it. Hopefully you reading this will prepare you a bit for the tough days ahead.
Make no mistake. The owners of that abandoned building you are looking at or that closeout you seek to buy was visited by the very monsters I'm speaking of.