Somewhere along the way, entrepreneurship became synonymous with risk-taking. We’re often led to believe that today’s successful entrepreneurs are impulsive, adventuring types who act first and plan later. They are gamblers and cliff jumpers. While this stereotype does apply to a few individuals and is probably the aspect that the public remembers most, it does suggest an unclear understanding of what it really takes to consistently succeed as an entrepreneur.
The word’s origin is from the Old French entreprendre, which meant “to undertake”, particularly to undertake an enterprise. Merriam-Webster’s current definition is “one who organizes, manages, and assumes the risks of a business or enterprise.”
So, what role does risk play? A preponderance of risk does not lead to long-term success, in any sense. However, the ability to assume risk, and at the same time develop systems to understand, quantify, and mitigate that risk, is a key hallmark of an effective business leader.
In order to achieve their goals, entrepreneurs need to nurture a sense of cautionary awareness. Ask yourself such questions as: “What stands in the way of my goals? What factors am I currently unaware of, and which can I plan for?” All entrepreneurs chart unfamiliar territory. Navigating the unfamiliar territory is simply a question of stocking up on the right tools.
By contrast, the other extreme is the entrepreneur who shoots from the hip, who sees a concept and goes for it. While this individual’s idea can hit it big, the associated business often flames out after a few years. You can take a look at any list of fastest growing companies, like the Inc. 500, from the last several years, and find countless companies that have since lost revenue and market share. Marketplace innovators, particularly those who have no fear of failure, are very important and helpful for testing out new ideas, but they’re not necessarily whom we as a bank tend to lend. Rather, this type of risk-hungry entrepreneur is better suited to venture capital and angel investor funding.
When we formed Lewis & Clark Bank, Jeff Sumpter and I met with and interviewed a host of advisors, potential partners, board members, and employees. We were excited about the opportunity, but cautionary about the risks. We took the time to understand the landscape and further refine our business model. Only when we felt fully prepared—after nearly fourteen months of full-time attention—did we open our doors for business.
The bank is founded on strategic entrepreneurship, and we align ourselves with entrepreneurs who are similarly intentional and disciplined. The strategic entrepreneur plans ahead, researches and determines variables, then factors in variables to minimize risk. When you’ve considered enough variables, it’s not a question of whether or not you’ll succeed; it’s to what extent.
All entrepreneurs are responsible for their successes and failures. With strategic planning, entrepreneurs can thrive even in a tough market. Strategic entrepreneurs, especially, define success for themselves—whether it’s financial, personal, relationship-based, or otherwise—and take the appropriate measures to enact it. Our ideal client is the entrepreneur who continually surveys the landscape, factors in variables, drafts a plan, and executes that plan with specific steps.
Methodology, not goals, differentiates these two extremes on the spectrum of entrepreneurship. By engaging in strategic thinking, you can achieve long-term success in nearly any arena.
CHARTING THE COURSE®