You must take risk to succeed.

It is unavoidable. A small businessman must accept risk as part of his life. There are no alternatives, no choices, no options. Risk is part of the very fiber of owning a small business and being a small business operator.

Some of you would like to be conservative, and being conservative is an acceptable philosophical position to maintain as your guideline for decision making. But lets be realistic, the very basic decision to be a small business owner and operator is the riskiest decision one could ever make, thus to make this basic commitment and then to hold tenaciously onto a conservative, no risk attitude is self defeating, unrealistic and basically unworkable.

Things happen every day in the world of small business operations which at its base require one to accept risk. Launching a new product is risky, hiring a new employee is risky, providing credit to customers is risky, signing leases and taking out loans with personal guaranty’s is risky, allowing your wife to sign a guaranty is insanely risky.

Being a small business owner is all about risk.

So what happens when things go wrong, cash flow declines and  debt service becomes impossible to service, and you want to get conservative and make bad decisions because you are afraid of risky strategies. You crash and burn.

You do not have the cash to make credit card payments, or service loans but are afraid to take the risk of default, so you prefer to tank your company by bleeding out the cash to service a note that you may only be able to support for a few more months before the end appears, the end of cash flow adequate to service your business needs. Then what? Then what happens to Mr. Conservative who was either afraid to pull the plug and shut down, or afraid to enter into a pre-emptive workout before the disaster destroys your business? What happens then?

Crash and burn is what. Nice decision Mr. Conservative. Fear won out, and risk took a back seat to logic.

TAKE THE RISK, MAKE A WORKOUT DECISION, AS SOON AS POSSIBLE. There will not be a clear path to follow, you may not know what will happen in the end or what your business and life will look like. But one thing is certain, if you do not take the risk of the unknown and enter into a workout scenario, your business will die a painful death. This is certain, but Mr. Conservative did not want to take the chance of walking head first into the unknown world of the workout and preferred to simply bleed to death knowingly and willingly, afraid to make the risky bu correct decision.

Makes no sense, but I hear it all the time, “I can’t default on purpose, I can’t reduce my payroll any further, I can’t do….it is too risky, I do not know the conclusion and cannot embark on a plan with no assurance of what will happen. I guess you would prefer to fail.

There are no guaranties in business. .. or in life for that mater, so why all of a sudden do the biggest risk takers of all, the small business owners,  in the face of obvious bone crushing debt, get conservative and not want to respond to the situation in a meaningful way, because there is risk and uncertainty and thus is above your  comfort level?

Apparently failure is preferable then risky salvation.

Let me break your bubble, you are all risk takers,  you cannot not change your context just because you are uncomfortable with the process. You must accept the reality that none of us are responsible  for nor could we have predicted the economic downturn we are confronting, but we are capable of dealing with the fallout and working out our debt so we can balance our new revenue projections and survive. Not to do this is an irresponsible act of self delusion and will result in self destruction…yet many of you are in the starting blocks  trapped by fear of the unknown.

You must take risk to succeed…have you forgotten this basic reality? Many of you  have.