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    41 Replies Latest reply on May 23, 2009 9:34 AM by DeanMalibu

    What risks did you take to run your new business

    NatOnline Tracker

      I am wondering what risk did you take to create and run your new business.

      When we started our business in 2005, my wife and me took the risk to make an equity loan on our house, which give us the cash flow to start our business, buy our first stock, etc....

      Please share with us, how you started your company.
        • Re: What risks did you take to run your new business
          LUCKIEST Guide
          Great question. Home equity loans can be like a two edged sword.
          Easy access to money, as you said "which gives people the cash flow to ----".
          Like credit cards and loans, all have to be paid back in time.
          If you succeed in business or pick winning stocks you have the funds to pay off the equity loans.
          Do not want to hear about those who did not have the funds to pay back the equity loans.
            • Re: What risks did you take to run your new business
              NatOnline Tracker
              I agree with you David that a loan equity is a two edged sword, but let me tell the story of my oncle. He did a similar thing to start his graphic design firm in France, it wasn't a loan equity, but secured a loan against his house, if I remember the start up was equivalent to $50,000. He was smart to invest at the right time and grow his business with emplyees, perhaps with some luck, 20 years later he sold his company before taking his retirement equivalent to a few millions dollars.

              I believe everybody going in business take a risk, small or big it really depends of the business and what you can afford.
            • Re: What risks did you take to run your new business
              LUCKIEST Guide
              Or if you want to get personal
              20 years ago I was an self employed Accountant who wanted to increase my business.
              We used our home equity loan to purchased the business of anther accountant.
              The business grew with the help of a telemarketer. Good timing and computers.
              • Re: What risks did you take to run your new business
                CorpCons08 Ranger
                I think I told part of my story before, but here it goes. I was working as a SVP of Commercial Development for a financial institution. It disgusted me to see the deceitful ways coworkers would manipulate business owners. I also could not stand office drama and having to work for someone. One day I came in and they told me that I cared about my clients too much. I agreed with them and told them goodbye. I had done private consulting for many years, and my business partner for many years more. It was a natural fit.
                  • Re: What risks did you take to run your new business
                    NatOnline Tracker
                    I understand, some owners not all fortunately, don't appreciate the value of some employees (the hard worker), it is a 50/50 either you create your own business or you find another job.

                    When I was working in a print shop here in Las Vegas, I did the job of two people, and I remember my manager (not the owner) telling me: I never see someone working like that in my all carrier. I was fast, organized, and not bad at work. Ready to show how a little guy like me from the old Europe doing jobs for our American friends ;-)

                    I was tired with the turnover in this field and worked as a sole proprietor design company, then we've got our son, and switched to another business online with a higher legal structure LLC.

                    I use all my equiment to take pictures of my products, resize them, added to the data base, upload them, create new pages on my e-commerce via FTP, etc....

                    So when I say switched business, not really, it is just the continuation of my job through my e-commerce.
                  • Re: What risks did you take to run your new business
                    Matzz22 Wayfarer
                    Great question. We all know the basic risk is risk of losing money because of whatever reason. And no excuse will work here, unlike job.

                    But in my mind, basic risk of opening small business and remaining small always is losing time of life, losing the time to share with family, losing time to enjoy, losing relationship etc, all the losses are time related. This is a 24 hr job; If the vision is big, and you can grow from small to big where you can set up a process/ system working for you in few years, there the loss is much less than the gain. You regain conrol of life once your system is in place, both in terms of time and money, also security. I definitely understand you still have to work but the intensity will be less and you will have trust-able help. That's what I am tring/hoping to create... let's see...
                    • Re: What risks did you take to run your new business
                      DomainDiva Ranger
                      I did not listen to anyone who said my idea was stupid...and there were plenty. I cashed in my SEP IRA for the first cash infusion to get going. I work all day to pay the bills and all evening to design my domain for the coders.
                      • Re: What risks did you take to run your new business
                        moogrdotcom Adventurer
                        The biggest risk i had was putting a ton of money through my amex charge card but in hindsight that was the single most important decision i made. Give me net30 payments and helped me learn to manage cash flow and i got a ton of points to boot ;)

                        some scary bills but with a little cash management and having checks available from other cards or LOCs to help float those tight months it worked out well and i figured in those costs as much as possible into my pricing.
                          • Re: What risks did you take to run your new business
                            LUCKIEST Guide
                            Moogrrdot, I am a SCORE Counselor and we see people putting a lot of money through their charge cards.
                            When it works out and the business succeeds, thats great. Unfortunately many do not succeed and goes
                            their business and credit. LUCKIEST
                              • Re: What risks did you take to run your new business
                                moogrdotcom Adventurer
                                The charge card was 100% used for inventory/drop shipping and wasn't used for actuall business expenses. The effect was a net30 account without having to pre-qualify to hefty requirements at my major distributors and it allowed me the 5-7 business days of float i needed to collect, deposit & skim off my profit and pay everything off :) Plus it nilled out my travel expenses since charging 2-3k/day adds up in points real quick. Amex is quick to respond - sometimes negatively to changes in purchasing/spending habits but usually with a little sweet talking they will leverage your purchasing/paying habits quickly into LOC's and other products with more purchasing power and in the retail industry (ecommerce) its ALL about purchasing power ;)
                            • Re: What risks did you take to run your new business
                              slavaret Adventurer
                              My first risk was giving up the certaintly of a regular paycheck to become a self-employed/independent consultant.

                              My second risk was giving up the consulting assignments to trade stocks. I'd say this was a bigger risk because you know that if you accept an assignment, you will earn an X amount, but you may spend the same amount of time researching/trading stocks and end up losing $$.
                              • Re: What risks did you take to run your new business
                                Lighthouse24 Ranger

                                The biggest risk was walking away from the security of an employment situation. I had a good salary, great benefits, was fully-vested, and well-treated. I knew my work inside-out, and probably could have "coasted" to retirement on existing knowledge and reputation alone -- and then relaxed on a nice boat somewhere.

                                But NOOOOOO . . . I just had to start my own firm, didn't I?
                                • Re: What risks did you take to run your new business
                                  BDS INC Adventurer
                                  Quitting a well paying job - but I won't change it for the world!
                                    • Re: What risks did you take to run your new business
                                      NatOnline Tracker
                                      I did that before coming to the US, and I don't regret my decision ;-)
                                        • Re: What risks did you take to run your new business
                                          frazzle Wayfarer
                                          Well, I guess to answer the post question, and to quote the old adage, the greatest risk is not taking one.
                                          I started my business three years ago and it has grown exponentially each year. Up until now, I have remained at my employers for that "security" paycheck, all the while juggling my business in the off hours. But now, those two worlds are colliding. I can no longer do both. I have used a LOC to get the business running, and I guess that's a risk, but I think there is a greater risk at this point: the risk of my health (both physical and emotional) of deteriorating if I continue at my employers. I've done that work for 15 years and have hated it for 10. I only stayed for the pay. But I now understand that money is nothing if you dislike what you do. Better to take a pay cut, take the risk and lose the steady paycheck, and do what you love. Life is too short to be miserable.
                                          1 of 1 people found this helpful
                                      • Re: What risks did you take to run your new business
                                        Small Biz Wiz Newbie
                                        One way to reduce risk is to access some of the very best experts in the fields marketing, accounting, business law, technology, etc. by joining a professional organization of small business owners. You can get a wide variety of legal and other professional services for a small monthly membership fee. Check out
                                          • Re: What risks did you take to run your new business
                                            NatOnline Tracker
                                            How much does it cost to reduce the risk and access to the very best experts?

                                            Do you think every business owners have got thousands dollars or even more for consulting?

                                            I trust my instinct ;-)
                                            • Re: What risks did you take to run your new business
                                              LUCKIEST Guide
                                              Then there is always SCORE. SCORE helps people in Business FREE
                                              You can visit SCORE on line and take 26 Online Seminars (FREE) at ""
                                              or maybe the following will help. LUCKIEST

                                              h3. 6 Steps to Small Business Success

                                              1. Start Smart
                                              2. Plan Ahead
                                              3. Set up Systems
                                              4. Seek out Sales
                                              5. Aim for Growth
                                              6. Leverage Opportunities



                                              1. Start Smart.
                                              Identify a niche. Don't compete to be the lowest cost provider. Look
                                              for what makes your product or service unique and adds a special value
                                              for the client and charge for that value. Every business has many
                                              facets. Start with what you know and like; start a business that has
                                              meaning to you. Keep in mind that we don't know what the future holds,
                                              many of the jobs and businesses of tomorrow don't exist today. You can
                                              create your own success.


                                              Now is the time to dream. To start smart, you should like the idea of
                                              the business. The way to earn a good income and build wealth is by
                                              serving clients well, making their life better in some way-it's more
                                              than filling a need in the marketplace. To succeed you want to test the
                                              idea to make sure your potential clients like the idea too. Test your

                                              2. Plan Ahead.
                                              People often ask me why bother with a business plan? Look at the
                                              lottery as an example. You may get lucky and get the winning ticket,
                                              but the odds are against you when you rely on random chance. I'm a risk
                                              taker...but not that much, minimize the risk of going into business and
                                              maximize your potential for success. Take the time to write a plan of
                                              how you get from point A to point B. A plan gives you a clear future
                                              focus and increases your chances of success.


                                              The first rule of a start-up is put some of your own money in the
                                              business. As the owner you must be willing to capitalize the business.
                                              The second rule is put as little of your own money as possible in the
                                              business. Prepare your plan and look for funding for your business from
                                              multiple sources, which can include a business loan or business line of


                                              Don't go it alone. Plan ahead now to build your team. Your team may
                                              include a CPA and an attorney that you work with as needed. Add a
                                              mentor from your industry and get a SCORE mentor to help you plan for
                                              success. No one has all the answers. You get more ideas and information
                                              by building a success, support team that can help you plan ahead.

                                              3. Set up Systems.
                                              The most basic system every business should have is a good financial
                                              system. Ask yourself how am I going to generate enough income to
                                              support myself and my family. Begin here. Put together a personal
                                              budget, so you know what it costs you to live. Now, you can move on to
                                              the business budget and sales planning, so you can see how many sales
                                              you need to break even and make a profit. The start-up expense plan,
                                              operating budget and your accounting software are vital to your



                                              4. Seek out Sales.
                                              The daunting question is how do you go about seeking out your first
                                              sale. Recognize that since you don't have a big ad budget to be seen by
                                              everyone, you need to target a niche and get connected in your market
                                              community, be it local, regional or national. You need other people
                                              selling for you-not employees-goodwill referrals. Get out and talk to
                                              as many people as you can. Join organizations that would have clients
                                              for your product or service. Become a visible part of your market, and
                                              then ask for the sale. You begin the sales process with people that you
                                              know. Yes, it's okay to start with friends and family as your first
                                              customers, and then broaden from there.



                                              5. Aim for Growth.
                                              The basic tenant of creating a company is that you own the company. You
                                              are not just creating a job for yourself. It's less risk and less
                                              investment to get a job. Building a business is creating a company that
                                              is more than the job itself. Think about the future. How large do you
                                              want the company to be in terms of sales, net profit and employees?
                                              Your answer to each of these questions will influence how you grow.
                                              There are varying costs and profits associated with growth. It's
                                              important to make a deliberate choice early about how you want to grow
                                              your company.


                                              6. Leverage Opportunities.
                                              Good luck. Good fortune. Good timing. All play a part in business. As a
                                              business owner, be very clear about your core focus for the business
                                              and how it serves clients. Your core business is what pays the bills.
                                              Then, as an entrepreneur you are about opportunity. When you see a
                                              potential opportunity or stroke of luck measure it against your core
                                              business focus. Good fortune is great, when it matches your vision for
                                              the business. Always consider if a good opportunity is the right fit
                                              for your business. If something looks great, but it's not in sync with
                                              your long-term plan and budget, think carefully before committing your
                                              company's resources.
                                                • Re: What risks did you take to run your new business
                                                  NatOnline Tracker

                                                  Score is a joke, no offense David :-)
                                                  • Re: What risks did you take to run your new business
                                                    DeanMalibu Adventurer
                                                    To re-enforce what Luckiest is saying
                                                    I spent nearly 40k on research and 4 and a half years of my time. My idea was simple, I chose the business, crunched the numbers. Then I looked at my competition, what do they do right?? What do they do wrong?? Can I compete or take advantage of their weaknesses??? Are their weaknesses large enough to exploit??? I then took the greatest tool I know...Lexus wanted Mercedes Benz customers, so they asked these consumers what they wanted. That is what I is an example of what I found...

                                                    I took a very hard look at Gamestop, and thought what do they do right??


                                                    They have the largest selection of games


                                                    They trade used & new games


                                                    They do not spend unnecessary money on advertising...the game producers do that for them.



                                                    Now what do they do wrong??


                                                    They don't rent games...renting fees are not taxed.


                                                    They don't deliver.


                                                    They are not open at midnight when many games are purchased.


                                                    They do not provide an area for gamers to really experience the games they are trying to sell.


                                                    They do not take advantage of gaming tournaments...more lost sales.


                                                    They do not show any customer appreciation.


                                                    They do not provide good customer service.


                                                    do not sell food & drinks...if you already have the gamers and they
                                                    are immersed in the new game, take advantage of that point of sale your


                                                    +*My business model



                                                    "Not Just Games!" addresses all these things.
                                                    deliver, we host tournaments, we sell food, we provide online gaming
                                                    for up to 12 customers at a time, we provide all the things "the
                                                    customer asked for!" All these things mean one thing...a bigger bottom
                                                    line! Nearly double what Gamestop's average yearly sales! What is that
                                                    number? They have a store average of 1.38 million, while we are looking
                                                    at 2.9 million. All this from addressing what the customer "Asked for!"*+

                                                    Luckiest always offers great advice so "take it!"
                                                • Re: What risks did you take to run your new business
                                                  Wingman Adventurer

                                                  Hi NatOnLine,

                                                  My story is very similar to the responses from others.

                                                  I had a good paying corporate job that was demanding ever more productivity and skills but not allowing you to acquire these new skills during the 'workday'. After the team that I supervised was outsourced I was working practically all day. Waking up for 5:30 am meetings and then also having to be on conference calls at 9:00 pm. Let me tell you, that got old really fast.

                                                  I ended up taking a HELOC, liquidating assets and started my own business. I'm at the point now where I may have to give up on my dream and go back to the corporate world so I can payoff my debts but I have been true to myself and lived up to my mantra. I don't want to look back at my life when I'm 75 and think to myself 'what if....'

                                                  To be a business owner you have to be willing to take risks. Some calculated and some, just a leap of faith and belief in your abilities. I'm proof that not all businesses will be successful but if you really believe in yourself and follow your dreams, you can bounce back. Just look at all the knowledge you will gain along the way and all the experiences/knowledge you can share with others.


                                                    • Re: What risks did you take to run your new business
                                                      NatOnline Tracker

                                                      Hi Wingman,


                                                      I understand and this is sadly true. Business is tough particularly when you start from scratch.

                                                      I will also say this is a daily fight against technical problems, optimization for search engines if you run an online store. Problems also to find new manufacturers, raise of shipping cost, raise of products prices, etc....All the business game.

                                                      Working back for a corporation no way, particularly in my field in Las Vegas they are paying peanuts for experienced people and 70% of the time they are scams.

                                                      Besides the casinos there is not much. As you can imagine many employers in Nevada come here to make quick money and go back where they came from.


                                                    • Re: What risks did you take to run your new business
                                                      CEO Space Scout
                                                      When I first started my first business, I risked everything. I left my job, had no source of income, was single at the time, and cashed in my retirement knowing full well I would have to pay taxes and penalty on
                                                      it if I didn't get it paid back.

                                                      I worked 18 hour days and I don't think I really slept well or ate much for the first 2 years.

                                                      I was determined.

                                                      Of course, knowing what I know now, I would never do those things again. I didn't know about CEO Space back then. Had I known about them, it would have been all different.

                                                      It all turned out well for me and I went on to create other successful ventures.
                                                      • Re: What risks did you take to run your new business
                                                        Dangelo Wayfarer
                                                        that is a great question but one that zooms in on the risk instead of the reward, but I will touch base on it anyway

                                                        It depends on the business obviously. If a business will require substantial time and monetary investment I have seen determined entrepreneurs sell their homes, take out their 401K etc... It paid off for many of them.

                                                        If it is a home business on the other hand, the investment is not more than a few thousand dollars or even less, so the risk is minimal or very low.

                                                        I personally had worked in my family's brick and mortar business since 12 and so realized that there was a lot of hard work (16 hr days) and a lot of financial investment. After graduating from with 3 university degrees, I decided to work in corporate America - it wasn't for me. I quickly realized that the American laws are written by the rich for the rich... as they should be.

                                                        After having tried several opportunities and MLMs I was turned off that there was no real training in place, the businesses were being run by people with jobs that still had to go to work and get a paycheck on the next Friday, so their mindset was that of an employee... (very different mindset between an employee and a business owner by the way), therefore my mindset was similar to the people I was following.

                                                        The difference and break-through happened for me when I decided to search and find self-made millionaires that could understand my situation and guide me to success... within 35 days I quit my job, went from working 12 hrs a day to 3 hrs a day, and made more money than most CEOs, or doctors in this country.... now, what is the risk for this lifestyle? Nothing... so the risk is relative... but yes, I had to borrow $2000 to get started... so I guess that was my risk...

                                                        oh, and there was another risk... the risk that maybe I would not succeed and my friends and colleagues would ridicule me as someone that was cought up in a scam... yeah, right... sometime when I drive by that old job, I see my colleagues quickly walking to the local deli for a quick sandwitch during lunch break... I wave, smile, crank up the music in my brand new range rover and head over to the non-for-profit organization where I mentor a teenager while others are still working... it is great driving in the bay area, CA in the middle of the day when everyone is working...

                                                        The highest risk is not taking one.

                                                        Nik D'Angelo