Taking Risks: How to Get Ahead in Business Without Having an Emotional Breakdown

Tim Stoddart
Aug 8, 2017 · 6 min read

If you want to get ahead, you have to take risks.

That shit is scary. I’ve gone through peaks and valleys and put myself in positions where I’ve thrown up from anxiety.

A few years ago, my partner Bryan and I were at a cross roads. We had about $20,000 saved up. After payroll and expenses we would save about $2,000 a month. We were scaling. We were bringing in new clients and we had the man power to be able to service them effectively.

Until one day we didn’t.

We needed a new office. We needed to hire another employee. We needed first and last month security deposit on a bigger office. So we had a choice.

We could either stay doing what we were doing, make some money each month and play it safe. Or we could take the risk, set back to zero and hopefully be in a position to grow.

We took option B. About a week later we bought new computers, new desks and moved in to our new office.

About a week after that, we lost our biggest client. Through no fault of our own, this particular client decided to bring their marketing team in house. Just like that, the rug was pulled out from underneath us.

I think it’s safe to say that I lost my shit. I was really scared. Bryan and I didn’t get paid for a month. I had to keep my cool in front of my employees and somehow manage to get myself out of the shit situation I was in. So I cut expenses, buckled down and I stepped up my sales game like never before.

That experience really taught me a lot. I learned about risk, about how to handle myself and about maintaining my composure in high pressure situations.

Here’s what I got.

Go All In

I hate when people give stupid advice like this. Assholes love to post inspirational quotes on Instagram and act like they know anything about building a business. It pains me to even join this club, but in this one particular instance I think it is fair.

If you are in a situation like this, you have to go aaallllll in.

Imagine if you are drowning. A drowning man wants only one thing. He doesn’t care about anything else. He doesn’t want praise or friends or sleep or food, he just wants to take a breath.

When you are taking a risk in business, you need to give yourself no out. There is no other option other than to figure out what you are doing. There is no backup plan, mommy and daddy can’t save you.

You either win or you drown.

There is a real physiological advantage with this type of mind set. If you want to take the island you need to burn your ships, just so everyone including yourself knows that there is no returning home to your safe space.

Sun Tzu says…

“When your army has crossed the border, you should burn your boats and bridges, in order to make it clear to everybody that you have no hankering after home.”

Scale Up to Your Risks by Diversifying

This is going to sound counter intuitive, but I highly recommend not risking everything all at once.

I know I just went on a rant about you you have to go all in if you want to win, so let me explain.

There will inevitably be some situations in which you are fighting for your life. Every person I know who has succeeded (in business, marriage, family, adventure, whatever) has come across an obstacle that could have completely ruined them if they let it.

But this is an anomaly. Most of the time, risk can be broken down into much more granular units of measurement.

As you grow, you will find that your business can be separated into departments, sections or even services. I like to have everything mapped out so that I know how much money is being brought in by each department and how much each department has in surplus.

This way, if I am trying to improve my outreach team, I know how many resources I have to dedicated improving that team. I don’t pull money from the social media team unless I am fighting for my life.

I decide how much it is I want to risk, and I go all in on that. I decide how much I want to risk, and then I risk it all. I fully commit. I take that entire basket of eggs and I dedicate myself to using those eggs to make some more chickens.

If none of my eggs hatch, I still have eggs in different baskets. Usually, after an investment pays off that means I have even more chickens to make more eggs which allows me to separate my eggs even more which allows me to take bigger risks while risking less.

You getting this so far? The mantra still applies.

Burn your ships. Risk it all, but only risk what you can. It’s a paradox I know, but it will keep your lights on and will give you the opportunity to learn so that the next risk you take will be more educated and more calculated.

Know Exactly What You Want

I think this is the biggest mistake people make (especially young people) is that they don’t specify what it is they want.

When I talk to a young person (as in someone younger than I am) who is just starting out, I always start by asking the same question. It goes something like this…

Me: What is it that you want?
New kid: I want to build a business.
Me: Why?
New Kid: So that I can be my own boss and make money.
Me: How much money?
New Kid: As much as I can?
Me: When will you get as much money as you can by?
New Kid: As quickly as I can.
Me: You’re fucked.

Before you risk something, you need to know exactly why you are risking it. What is the purpose? You can’t just allocate resources to something because you want to get better. You need to know the exact goal and put a timeline behind the achievement of that goal.

Here is an example…

Two months ago, I decided to build an online course network. The new website is called Sobriety Engine. I launched my first course and I am building a second one now.

The first expense was the website. I could either custom build a website or I could put it on a platform designed for online courses. I decided to put it on Teachable. This is $30 a month.

I needed to create the course. I dedicated my absolute best writer and researcher. All in all it cost me about $500 to get it done.

So I launched the course at the end of June. After everything, I risked $590 on launching my course. So my goal was to get $1000 in total revenue in July. I didn’t quite hit my $1000, but I got close. $940 total revenue. At 3% processing fee for credit cards, that meant that I would have $911.8 gross revenue.

Subtract my $590 in expenses and that leads me with a gross profit of $321.8. So I risked some eggs and I got some more eggs.

Now I have more chickens. Not only that, I have an entire new revenue stream that will add value to peoples lives and will help build my internal business portfolio.

Take Your Emotions Seriously

I wanted to write this article and maintain the idea that risk is both a logical and emotional subject.

Nothing will guide you to make stupid decisions like your emotions. I don’t have any technical advice for managing emotions other than to warn you to take it seriously.

Writing life lessons about risking $600 for a new course is one thing, but there will be other risks you need to take in life that are much bigger with much deeper consequences.

If you’re like me, you will need to find a way to cope with this anxiety. This is a different topic all together, but I have suffered from anxiety attacks that were so powerful I thought my heart was going to explode. I honestly thought I was going to die.

Be forthcoming with this. Risking things that you have worked so hard to get is stressful, but you can’t let it get the best of you.

No matter what happens, understand that win or lose, it is the journey that matters most. Even if you lose, you haven’t actually lost until you stay down for good.

Fall seven times, get up eight.

This article was originally published on TimStodz.com. Subscribe to my weekly newsletter for your weekly dose of resources to help you design your best life.

Tim Stoddart

Written by

CEO of Stodzy Inc. http://www.timstodz.com/

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