There are countless entrepreneurs taking enormous risks every
day. But let's begin with Ramin Kamfar, 38, who last year grew
his Eaton, New Jersey-based company, New World Coffee-Manhattan
Bagel Inc., from a robust $40 million-dollar business into a $400
million one, which makes it the nation's largest bagel bakery
chain, according to The Industry Standard magazine.
Kamfar has accomplished this by taking what many entrepreneurs
would consider a major risk, particularly these days: New World
spent $160 million to buy a bankrupt company, Einstein/Noah Bagel
Corp., which was in debt to the tune of $30 million. In fact, over
the years, Kamfar's company has made a habit of buying bankrupt
bagel chains, including Manhattan Bagel Co., Chesapeake Bagel
Bakery, New York Bagel Enterprises Inc. and its subsidiary Lots
a' Bagels. Kamfar often says he wants to become "the
Starbucks of the bagel industry."
But ask Kamfar about the risks of buying up bankrupt bagel
chains, and he doesn't see it as dangerous. "Risk is part
of any business, and it's inherent in any job, whether
you're an entrepreneur or a midlevel manager," says
Kamfar. "The trick is to learn to manage that risk and to make
sure that all risks are calculated risks." He points out that
Einstein Bagels spent $600 million creating its bagel empire. New
World purchased the 465-unit chain for a relative bargain: $190
million, when you add in Einstein's debts.
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Still, these are bankrupt companies he's buying. No worries,
says Kamfar. New World is structured so if a new addition to the
business doesn't turn around, it won't bring ruin to the
overall enterprise. "One book I re-read all the time is
The Art of War [by Sun Tzu, Oxford
University Press]," says Kamfar, "and one of its central
messages is: 'Don't get defeated.' While that may sound
simplistic, or even silly, it's actually very profound. As you
make your bets, don't do anything that will allow your company
to go under. Make certain you always have a Plan B."
| ISN'T
THAT DANGEROUS? |
|
| What's a stupid risk, and what's a calculated
risk? When it comes to your business, only you can determine that.
But if you're trying to figure it out, try following these five
steps. 1. Determine the worst-case
consequences of taking the risk. If you can't live with the
consequences, then it's probably a stupid risk, and you need to
hatch a contingency plan or retool the risk so the possible
catastrophic results can be downgraded to at least just
"bad." 2. Research the risk you want to take
as much as possible. Wise entrepreneurs look-or at least
glance-before they leap. 3. Seek advice. Whether you hire a
consultant, discuss the risk with your employees, or talk it over
with a friend and get some feedback. 4. Ask yourself: "Will I lie
awake at night for the next several years, wishing I had taken this
risk?" 5. Now ask yourself this question:
"Is not taking a risk a bigger risk than taking it?" If
the answer is yes, then what are you waiting for? |
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