All successful SME business owners and entrepreneurs take business risks to become successful, if you aspire to a leadership position in your niche or within your locality you must embrace risk taking.
The business risks should be calculated and the potential benefits need to be identified beforehand. This is a part of business many business owners struggle with – understandably they are keen to keep costs down and play it safe but that is not the way to stimulate growth. When was the last time you took a risk for your business? Risk taking may be the difference between business stagnation and business growth. Below are five big risk takers who went on to reap their rewards.
Business Risk Management – 5 big risk takers to inspire you
1. Julian Metcalfe and Sinclair Beecham
Risk taken – Quit their day jobs as surveyors in 1986 to take control of the first Pret a Manger in Victoria station, London. Metcalfe and Beecham sold the chain to private equity firm Bridgepoint for £350 million in 2008.
2. Mark Pincus
Risk taken – Turned down his last chance at funding for his (first) company Freeloader in 1996. He had one month of cash left, and the investor lined up wanted him to hire a CEO of his choice in exchange for the funding. He walked away. Managed to get a new line of funding months later, sold the company and in 2007 went on to found Zynga the social gaming company (creator of “FarmVille” and “Mafia Wars” popular on Facebook) – A pre-IPO valuation of Zynga in Dec 2011 valued the company at between $7.7 and $9.04 billion.
3. Elon Musk
Risk taken – Dropped out of graduate program in applied physics and materials science at Stanford University to start Zip2, with his brother Kimbal. Zip2 provided online content publishing software for news organizations. In 1999 Compaq’s AltaVista division acquired Zip2 for US$307 million in cash and US$34 million in stock options. Elon went on to found PayPal, Spacex and Tesla Motors.
4. Alex Tew
Risk taken – Relied on his own unique idea – The Million Dollar Homepage to pay for his university education. The Million Dollar Homepage sold pixels of adspace to advertisers and went onto make a gross total of $1,037,100 in five months during 2005. After costs, taxes and a donation to The Prince’s Trust, a charity for young people, Tew’s net income was around $650,000 – $700,000. Not bad for 5 months work – ironically but understandably after the success of the project Alex did not go to university and continues to follow pursue entrepreneurial projects.
5. Jeff Bezos
Risk taken – In 1994 Bezos left his job as vice-president of the Wall Street firm D.E. Shaw, moved to Seattle, and began to work on a business plan for what would become Amazon.com. In 1997 the company went public and Amazon.com became the first internet retailer to secure one million customers. In September 2011 Bezos’s estimated net worth was $19.1 billion dollars.
Has this inspired you? Remember Woolworths? They were safe and didn’t take risks. Their business model did not change in over 100 years but the market place did and they got left behind and then shut down.
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