Failure Is a Possibility
By definition, risk means the outcome may or may not go the way you hope it will. A corollary to accepting risk is accepting the possibility, and sometimes the reality, of failure. In small business as in life, things don’t always work out as planned and hoped. I can’t recall any successful entrepreneurs I know who haven’t had at least a few business failures along the way. But they don’t dwell on the failures. Rather, they look at them as bumps in the road and unfortunate exceptions—and, in some cases, valuable learning opportunities.
Some people, in fact, argue that a true entrepreneur is someone not afraid to fail. The person who tries one business venture, sees it fail, and then never tries again is hardly an entrepreneur. The person who tries a venture, sees it fail, gets up, brushes himself off, and asks, “How can I learn from this for next time?” is the entrepreneur I’d bet on.
There will be disappointments. They may or may not be as big as the failure of an entire venture, but you’ll have ideas that don’t pan out, sales that are lost, advertising efforts that don’t yield results, and more. This is the definition of risk: some things work, some don’t. Capitalize on the winners and learn from the failures.

Learn to Be Analytical and Objective
Much of the coursework in an MBA program involves learning the various facets of modern business. Like other MBA students, I studied marketing, accounting, finance, and general management. By far the most important principle I learned, however, was not the focus of any particular course. That principle was the need to objectively think through and analyze business problems and opportunities. There is little room in business school or in business for wishful thinking or supposition. There is room for judgment, even for gut feeling, but they need to be objectively analyzed with full consideration of the known facts and research. More important, there must be an overall business objective—a framework for proceeding according to a clear and stated direction. That framework can be to become a public company within five years; in the world of lifestyle entrepreneurship, it can be to limit your work to 20 hours per week so you can write, or ski, or spend more time with your family. Obviously, a company with the former goal would make different decisions along the way than a company with the latter goal. The point is that the business direction would be set based on the chosen objectives, and decisions along the way could be evaluated based on those objectives.
Problems and opportunities need to be evaluated based on their challenges and merits and their impact on the overall objectives and purpose of the business. Though few business professors would approve of, or even understand, the objectives of a lifestyle business, such objectives are no less legitimate than more traditional business objectives like going public or dominating a niche. Though the ends may differ, lifestyle entrepreneurs must apply the same objective analysis to their businesses that other business managers do.
It is often helpful to clearly define a problem or opportunity and list three or four different options for dealing with that problem or opportunity. In this analytic way, the most appropriate option for a given situation can be chosen, based on well thoughtout criteria. For example, suppose you’re a self-employed computer programmer accustomed to short-term projects that pay $3,000 to $5,000. Then suppose you are asked by a company to prepare a proposal for a contract that would involve on-site work at seven different locations in the United States and Europe. The job has to be completed in three months; it involves programming in a language that you don’t know. The job would therefore require at least one other programmer who knows that language. The entire contract would be in the $30,000 to $50,000 range. You define your four options as follows:

Pass on the job entirely.

Contact a larger programming company that you’ve worked with in the past and make a deal to try to get the job for them with a commission for yourself as well as some of the work.

Do the proposal as requested and be ready to hire the requisite programmer at a moment’s notice; also be ready to gear up for a job ten times the size of your normal jobs.

Try to persuade the company to work with you on the parts you can readily handle and offer to assist them in (but not take responsibility for) finding another programmer for the parts you can’t handle.

Any one of these options is viable. However, if you were committed to being a lifestyle entrepreneur with the business objective of limiting your work-time commitments, the third option is probably not your best one. On the other hand, if your aspiration is to grow rapidly, the opportunity offered by option 3 could be seen as your potential big break, so only the third option would make sense.

Sometimes the outcome of an objective analysis of your business needs runs counter to the objectives of your profession. Following business school, I reentered the video production business. By applying the analytical tools of business that I had learned, a problem became apparent. Sometimes, the best decision from a business perspective is not the best decision from a video production perspective. It is invariably more economical to get a job done in the least amount of time possible, because every additional day taken to complete a job increases expenses and lowers the profit margin. However, video production is partly an art, and time constraints are therefore not well tolerated. Translation: sometimes we had to make choices between an adequate video that was profitable or an artistically superb video that was less profitable.
Different people may have made different decisions in a circumstance like this. There may be no universal right or wrong, but in certain situations an objective analysis will yield a better answer from a business perspective. To the extent that it’s reasonable, business decisions should be based on an objective analysis of a situation and the available data as well as in keeping with your overall objectives.
Email: info@walmartcom.net