Risky Business

Taking the First Step

Once an entrepreneur has let the seed of risk-taking grow in his or her mind, the next logical step is usually jumping off the corporate ship and leaving behind all those plump and juicy perks like company-subsidized health insurance, the retirement plan, gym and day-care facilities, and, last but not least, the steady paycheck.

"Just taking that first step, just starting, is a risk," notes Rene Reid Yarnell, author of The New Entrepreneurs (Quantum Leap, $15, www.yarnell.com). As each of these entrepreneurs can attest, "It takes more money than you've allowed for; it takes more time than you ever wanted to give it; and it forces you to have cash-flow worries, never-ending expenses and problems with clients. So why do people do it? Because the alternative of working for someone else is so much worse to an entrepreneur. Going out on your own gives you the chance to make a far greater income and utilize your talents to the fullest."

When Brian Boettcher, 27, left a management training program two years ago, he was very aware that he would be leaping off the corporate ladder. "I was on the fast track," he says. "I knew I would be successful in the company, but I had to jump ship, even though it was scary."

Boettcher started ReloNetworks, a San Mateo, California, relocation service that specializes in home and apartment searches. When he noticed a need for such a company in the San Francisco Bay area, he maxed out his credit cards, borrowed money from his family and waited for clients. None came. He toughed it out, set a date to close up shop, and, a week before his self-imposed deadline, landed a dream contract that made his business turn the corner. "When you start a business, you have to be prepared to lose everything that's comfortable," he says. "That creates pressure that one has never experienced in corporate America. It's an important risk to go against industry standards, to do something completely different and creative."

Dan Schmitt, 33, co-founder of Advantage Integrated Marketing Inc. in St. Louis, says he, his brother and a friend started the database-marketing service with $7,000 cash and no plan. He says having no money and no set agenda was refreshing, although it almost drove the company out of business three times.

Once you get used to having no security, it doesn't seem so risky. "People think we're really crazy, taking the risks that we do," says Schmitt. "Last year, we decided to scrap our business model, and we spent $2 million going after a new product. People thought that was a stupid idea, but if you don't take the risk, how can you turn it around?"

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This article was originally published in the July 2000 print edition of Entrepreneur with the headline: Risky Business.

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