Taking risks is a huge part of the entrepreneurial journey. You need to invest resources, time and effort to bring your venture to greater heights, and it is guaranteed that there will be many forks on the road and lots of trial and error before you can get there.
We’ll take a look at two circumstances where entrepreneurs had to experiment in their business and take the risks to reap the rewards.
An exciting, yet unfamiliar, endeavour that becomes a success
Barnbougle Polo was only an afterthought due to an available area in the Barnbougle Resort property. Despite the unfamiliarity with the sport, Barnbougle Golf Managing Director and Barnbougle Polo Co-Founder Penelope Sattler and her team took the plunge, not knowing that Barnbougle Polo would become a sought-after event in Tasmania.
“The Barnbougle Resort comprises of two golf courses – Barnbougle Dunes and Barnbougle Lost Farm – which are separated by the Great Forester River. Between the courses, there is a piece of land that is part of Barnbougle Farm, which wasn’t utilised for the courses as it was too flat – terrible for golf, perfect for polo fields! We had very little knowledge of the sport. However, we felt that polo and golf were a match made in lush green grassy heaven and therefore decided to delve into the ‘Sport of Kings’,” she explained.
While the idea was interesting enough, it was not without challenges as it involved a costly investment. “The biggest risk was the substantial financial outlay and the possibility of a lack of return in this investment. Secondly, running a major event and doing so poorly could be extremely detrimental to the brand we had created,” Penelope disclosed.
Yet, they went ahead with their plans, and the result was an overwhelming success. Penelope revealed, “The event has become a staple on the summer social calendar in Tasmania which has widened our brand exposure and strengthened our appeal to the younger demographic and non-golfers. The North-East of Tasmania hosts very few large scale events so the polo has been a great opportunity for Tasmanians to experience the ‘Sport of Kings’ in their state and enjoy a fun day out. It has also given us a great outlet to showcase our amazing Tasmanian producers and give back to the local community.”
Managing risks and making them a springboard to the next level
“Like most entrepreneurs, I have always had big dreams and goals I have set myself to achieve,” Crisp Solutions Founder and CEO Michael Clark declared. “To make these things happen, I have had to make big moves and take what could be considered as large risks.”
As he started his entrepreneurial journey at a young age, Michael is grateful to find guidance from entrepreneurs who have made their journey ahead of him. “Fortunately, one of the first books that I read cover to cover was Losing My Virginity by Richard Branson. I was about 19 at the time, and one of my biggest takeaways from that book was that you really can do anything if you set your mind into it. You can approach deals and so-called high-risk situations, such as starting an airline with creativity and a plan to protect the downside, in such a way that what appears on the surface as very risky offers very little risk at all.”
He recalled the time he ventured into entrepreneurship with no experience and limited resources. “In the very first business I founded while still at university, I locked myself into a long-term supply contract with a national retailer. Problem was I had under $3000 in the bank, no access to investment and had zero business experience. My minimum commitment to the large manufacturer was to buy 10,000 units of one product which cost tens of thousands of dollars. Plus, I needed to find the money for additional business startup costs. My family and friends either said it was too risky and thought it was a bad idea or simply couldn’t help.”
After feeling completely stuck for a long time and ready to give up, Michael luckily came up with a plan. “I arranged terms with the retailer to agree to an initial order that would cover all my expenses. I then got a commitment from them for very short payment terms of 14 days from in-store delivery. Lastly, I negotiated with the manufacturer to allow me 60-day payment terms on the first delivery. And there it was – an almost zero-risk scenario where I was profitable and cashflow-positive a little over 2 weeks after the business started,” he narrated.
That was 18 years ago and Michael’s business is going stronger than ever today. He has since gone on to apply this approach to risk in many other businesses and opportunities.
Out of the courage to take the risk and jump into the water, Michael has reaped the rewards of his hard work, persistence and determination to keep going forward. “I have built houses and a real estate portfolio in different corners of Australia, as well as in England, with a small amount of capital, even when I have never visited those parts of the world prior. I invested in a unique trading opportunity, which on the surface was high-risk and had a direct negative impact of more than a million dollars when it fell apart, but turned out that the real fall out was minor. I walked away from a good-paying job at a leading global consumer goods company to take a chance on a new idea. I’ve started several business partnerships where capital and energy were required and at risk. But through smart preparation and agreements covering, if they didn’t work out, the downside was minimised.”
Looking back, Michael has learned a lot out of the decisions he has made, not only for business but also in life. The lessons are nuggets of wisdom that he has taken with him as he continues with his entrepreneurial journey. “From my experience for any growth at all in life, there are tradeoffs. You constantly need to take big risks to take your life and business to the next level. I strongly believe that if you manage that risk the right way you will be able to stay in the game much longer and give yourself more chance of making it big,” he imparted.
We’d like to hear from you. Share with us if you have experienced taking risks by experimenting in your business and how it brought you huge rewards.