As an entrepreneur, regardless of the amount of revenue being generated or capital funding, there is never a moment where you are free from making a critical, risky business decision. When working with limited capital constraints, basic business decisions like purchasing office equipment or hiring an employee can and will inspire fear. Many of the world’s population are raised to value winning. And yet, becoming an entrepreneur you’re destined to fail, sometimes with grace and sometimes flat out miserably from time to time. Perhaps that’s why so few of the general population choose to be entrepreneurs.
For every business decision, there is a risk entrepreneurs must take
Economists call this principle the risk-return tradeoff. Although many may not have officially learned this principle, everyone with a pulse has felt its impact at one point in their life. Investopedia’s definition explains this principle perfectly:
“Low levels of uncertainty (low-risk) are associated with low potential returns, whereas high levels of uncertainty (high-risk) are associated with high potential returns. According to the risk-return tradeoff, invested money can render higher profits only if it is subject to the possibility of being lost.”
What they’re saying is, if you were to see this caution sign in front of a dark stretch of road you’d think twice, pause, wipe the sweat off your palms and maybe even turn away.
For Joanne Lang, CEO and Founder of AboutOne.com, thoughts with sentiments similar to that sign came everytime she considered building her own tech startup.
“It took my son almost dying for me to get over my fear.” —Joanne Lang speaking at the Alliance for Women Entrepreneur Philadelphia’s Members Mentoring Members event
Thankfully, her son is alive and well as is her startup (which she successfully raised over $4.5M in seed and series A funding for). Lang realized the risk of failing in a business venture was not so big after all when compared to potentially losing a loved one, and she no longer allowed fear to paralyze her.
There are many fears entrepreneurs like Lang will face when leading a business. Here are a few of the biggest fears that will need to be overcome:
Fear of the unknown
Fear of being a lone ranger
Fear of having to trust others with your livelihood
Fear of failure
Fear of success
Each of those fears are valid and will impact entrepreneurs at various stages of running their business.
Based on my experience and advice taken from other successful entrepreneurs, here are a few strategies for overcoming those 5 fears:
1. Fear of the unknown
How are you reading this right now? Is it from a smartphone, tablet or computer? Are you sitting in a heated room or feeling the cool breeze of the A/C? Wait you’re sitting? And reading English, a modern language? Just imagine practically everything we use and do has only been in existence for a small part of human beings’ existence. All of the things you’re taking for granted right now as you read this article would not have been possible if someone didn’t come up with a new, prior to unknown idea. Just as the young become old, so will your new idea if you take the risk and share it with the world.
2. Fear of being a lone ranger
When people come to me with business ideas looking for encouragement the first piece of advice I give them is to get comfortable doing things independently. I tell them to write down a list of 5 things they’ve been wanting to do but had no one to do it with. Then, to go do it.
After embracing their fear of being the lone ranger in their personal live, doing the same professionally may not seem as hard. Then, they should focus on writing down their business idea with a list of 5 steps they need to take to bring it to fruition. Creating a flexible plan for executing your business (like the Business Model Canvas for instance teaches) should be a required entry on that list.
3. Fear of having to trust others with your livelihood
For the more seasoned entrepreneur who is generating enough revenue to hire an employee, hiring can be very scary. After spending so much time managing every aspect of your business yourself, these entrepreneurs develop an intense attachment similar to the mother and father of a newborn child. But you must loosen the cord to live the balanced, happy life you envisioned when launching your business.
The best thing you can do in this instance is acquire enough data or knowledge to make the fear feel unwarranted. For Rudy Karsan, co-founder and CEO of Kinexa, a talent management company acquired by IBM, his biggest mistake as an entrepreneur was also tied to fear and cost him a whopping 25% of his net worth.
Work on being more like this guy:
“I’ve never been reckless—it’s always calculated.” – How to Drake It in America – GQ Magazine
4. Fear of failure
This fear is all too common in our culture, which teaches us to value winning alone and rarely to find the value and opportunity in losing. To overcome this fear, you need only take the words of Joanne Lang to heart:
“It only takes one person to support you and help you move along. It only takes one person to invest in you, connect with you, buy from you. Sometimes people will join you for things you be surprised by…Don’t let your biggest failure be not aiming high enough.” —Joanne Lang, CEO and Founder of AboutOne.com
5. Fear of success
I know you’re thinking how could I possibly put two polar opposite situations on the same list. Well, they both inspire fear! When your business is becoming successful your mind no longer is on the present. As a professional in a large organization successful means you may get a nice raise or year end bonus. As an entrepreneur of an early stage startup you become completely absorbed in worrying about how to most effectively scale: Do you need to hire 1 or 2 employees? Will they need to be full time? Do you need to reconfigure your production line? Do you need more customer support channels to keep users happy? Do you need to invest in a content marketing or direct sales effort to scale your customer base at a faster rate? The present is only the beginning of the road of longevity you expect of your business.
Yet again, the rapper Drake sums up this conundrum in one line:
“It’s funny when you coming in first but you hope that you’re last, you just hope that it last.” – Drake, “Lust For Life” song
Focusing on how you will scale your business is a great thing. A business that is growing is a healthy one. Don’t let fear keep you from taking the steps needed to expand your business. To overcome this fear, try reaching out to entrepreneurs and owners of businesses similar to your own who have successfully scaled their business to a level you’d like to achieve. Pick their brains on how they did it, and ask them for feedback on your intended course of action. Use that insight and feedback to develop your 99% failure-proof plan with key dates specifying when you will have executed a certain aspect of the plan and expect to have achieved X% of growth.
What fears have you had to overcome as an entrepreneur? Share your experiences in the comments below.