Money for Home Business: Finding The Right Risk Balance

I like risk. Risk and I have spent a lot of time together, and we’ve become close friends. Risk has spent a lot of nights sleeping in my bed, nestled cozily between Jamie and me.

Jamie does not like my relationship with Risk. He thinks we’re too close. He thinks I don’t see Its flaws, the problems It could cause, the havoc It could wreak on our home business. The perfect entrepreneur would be halfway between Jamie and me - someone with a healthy balance. (Maybe we could just have Jack take care of it.)

Knowing where you exist on the risk spectrum is vitally important to entrepreneurs. If you are well aware of the strengths and weaknesses of your position, you can better determine who to ask for help, who to choose as mentors, and who to avoid like the plague. You’ll be able to intelligently decide when to spend your money and what to spend it on. Most importantly, you’ll know your business’ financial potential and how to optimize your position for the best possible gains.

The Riskophile

Riskophiles get off on danger, unknown outcomes, and fear. They find it a healthy motivator. I, for example, am quite comfortable when my bank account is in overdraft. It gets me off my ass. I think there’s nothing like not having any money to make you want more money. Jamie, not so much. Jamie is a Riskophobe.

The Riskophobe

Riskophobes are safer people. They get uncomfortable spending money they don’t have to, or taking actions that might cause them financial hardship. He wants to know, beyond a shadow of a doubt, that we will be able to pay our rent on time. The fact that we have paid our rent on time for the entire four years we’ve been together is irrelevant. He wants to know it again. Now.

Finding Your Balance

If you’re anything at all like every other person on this planet, your balance is off. You exist too far on one side of the spectrum. You either take too many stupid chances, or you miss opportunities because of fear.

In order to be successful as an entrepreneur or a freelancer, you need to get out of your risk comfort zone and come closer to the middle. To make money, you have to take some risks. If you want to keep money, you have to stay a little safer.

Where’s your spot on the Risk-to-Anti-Risk continuum? Do you like where you are?

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By Naomi Dunford - Oct 24, 2007 in Home Business Money - No Comments