Calculated Risk

1. Calculated Risks • www.lifethenfinance.com www.lifethenfinance.com

2. Definitions: • Calculated Risk: • A risk that has been given thoughtful consideration and for which the potential costs and potential benefits have been weighed and considered. • Dedication: • Selfless devotion to a purpose, cause or project. • Feedback: • A reaction or response to a particular process or activity. • Perseverance: • Steadily pursuing a course of action or a purpose in spite of difficulties, obstacles, or discouragement. • Reward: • Benefit resulting from some event or action. • Risk: • Exposure to a chance of loss or damage. www.lifethenfinance.com

3. Time Risk • It is suggested that you minimize the financial risk when starting a business venture. However • take ‘time risk’ • Time risk is when you put time and effort into a business and risk losing that time that you invested if the business doesn’t go as planned. • The good thing about ‘time risk’ is that you often gain valuable skills. www.lifethenfinance.com

4. “There is no failure, only feedback.” • If you’re getting feedback that something you’re doing isn’t working, that isn’t failure, that’s valuable information that you should look at as a learning experience. • The only failure would come from not listening to and learning from any and all feedback that you receive. • The less risk you are willing to take, the less chance you have of being successful. • If you aim at nothing, you will hit it; therefore if you want a chance at realizing your dreams, you will actually have to reach for them. www.lifethenfinance.com

5. Keys to being a Successful Risk Taker: • Don’t be too critical: • Perfectionism has its place, but if you consistently wait to take any risks until you feel like all the pieces are in place, then you’ll never get anywhere because it’s up to you to put the pieces of the puzzle together as you go. • Don’t give in to fear: • Fear is a very real thing, but it should never have a place in your decision-making as fear can give you false signals that keep you from taking any risks at all. • Go for it: • Look around at other successful people and think about the risks they took to become successful. • Like them, you must be willing to do whatever it takes to make your business work. www.lifethenfinance.com

6. Risk Takers: • Anytime you take a risk there is a chance of failure. • The difference between successful and unsuccessful people is how they deal with failure and mistakes. • Successful people look at mistakes and missteps as learning experiences, and they take • them as opportunities to grow and evolve. If you keep making the same mistakes over and over, or if your instinct is to just give up, then you will never achieve success. • It is easy to get discouraged, to fear rejection, and focus on negatives, especially if the people around you don’t share your vision, but it is up to you to decide if you would rather be a talker or a doer. • The future is unknown therefore by definition it is risky, but you can reduce your fear and your chances of failure by learning to take calculated risks. www.lifethenfinance.com

7. Risk Takers: Cont… • People told the Wright brothers that human flight was impossible but now you can get from New York to London in about eight hours. • Prior to the popularity of the fax machine in the 1980s, most people would never have dreamt that you could instantly transport a copy of a document from one place to another. • Alexander Graham Bell probably never imagined being able to drive down the road while talking on the phone. • Never let anyone tell you that you can’t do something because you can do anything you set your mind to when you have vision and determination. www.lifethenfinance.com

8. Business Plan: • Business Plan: • A summary of how a business owner, manager, or entrepreneur intends to organize an entrepreneurial endeavor and implement activities necessary for the venture to succeed. • Market Research: • An organized effort to gather information about markets or customers. • Marketing Plan: • A written document that details the necessary steps to achieve one or more marketing objectives for a product or service, a brand, or a product line. • Strategic Plan: • A written document that describes an organization’s short, mid and long-term goals or objectives, and priority actions to take. • Strategic Planning: • A organization’s process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy. www.lifethenfinance.com

9. Action Steps for Starting or Growing Your Business: • Conduct market research • Develop some financial projections and a timeline for your business • Identify what you need to get started • Using the outline provided, write up a business plan for your venture • Develop a marketing plan www.lifethenfinance.com

10. Action Steps for Starting or Growing Your Business: Cont... • Participate in seminars, trade shows, and classes that would be beneficial for your business • Review your progress each week • Update and revise your goals, strategies and business plan as needed • Keep it simple – pick 2–3 tasks to complete each day • Stay focused! www.lifethenfinance.com

11. Market Research: • Analyzing the market and the competition for your products is one of the most critical elements of creating a marketing plan. • Market research can provide you with alternative approaches to the market, help you develop short and mid-term goals, and allow for more accurate profit estimates • Once they have a product or service, market research is the next step so that you can determine whether there is a market, how profitable the market could be, and what your position is within that market. www.lifethenfinance.com

12. Conducting Market Research: • Is my product or service constantly in demand? • Can I create demand for my product or service? • Is there much competition for my product or service? • Can I compete effectively in terms of quality, price and delivery? • Can my product or service be priced to support projected profits? www.lifethenfinance.com

13. What you should know about your market: • Whether there is constant or seasonal demand for your products or services, how much competition there is, and whether current market prices will give you the profits you need to meet your goals. • Once all of the questions have been answered, the company will be better able to perform the necessary market research and prepared to use the information you gather to increase your profit potential. • Keep the data collection and analysis process organized, you should maintain a notebook or a folder of data and information on your computer, so that you can organize and refer back to the information as needed. www.lifethenfinance.com

14. Do the research necessary to answer the following questions: • Who are my customers and where are they located? • What need could I fill for my customers? • Is my product or service affordable? • Is my market growing or declining? • What is the economy like in my product or service area? • **Market data research doesn’t have to be difficult, time consuming or expensive.** www.lifethenfinance.com

15. Information Sources: • Trade associations and journals • Regional planning organizations • Chambers of Commerce • Local banks and Realtors • U.S. Government publications • Customer surveys www.lifethenfinance.com

16. Parts of a Business Plan: • Executive Summary: • This is a summary of the key elements of your plan. It is basically like an introductory paragraph of a long book report. It summarizes the key points of the plan. • Company Summary: • This gives you clarity on what your business is about, your history and where you want to go. • Products and Services: • This is what your business will generate revenue. • Market Analysis Summary • Explain who your customers may be and who your competitors are. This also covers the packaging, pricing and how you will get the message out. www.lifethenfinance.com

17. Parts of a Business Plan:Cont... • Web Plan Summary: • Explain how you will use the web to enhance your business. • Management Team: • Explain how the business will be run and who the members will be. • Financial Analysis: • This is the budget for your business. It tells how much to start it and how much to run it. www.lifethenfinance.com

18. Costs: • Start-up costs: • These include any supplies or equipment needs, initial marketing costs, and other expenses you will face before you sell to your first customer. • It is important to keep your start-up costs minimal, as it is a learning experience to run your own company. • Operating costs: • These are the day-to-day expenses of running your business www.lifethenfinance.com