#BusinessGamble #RiskAndReward #SuccessStory #BiggestGamblePayOff #EntrepreneurJourney
Have you ever taken a huge gamble to build your business?
Imagine being in a situation where you’re on the brink of bankruptcy, with limited resources and time running out. This was the reality for Fred Smith, the CEO of FedEx, back in the 1970s. With only $5,000 left in their account and a looming fuel bill of $24,000, Smith made a bold decision that ultimately paid off.
The adrenaline rush of taking a risk
Smith decided to take the last $5,000 and head to Las Vegas, where he gambled on a game of blackjack. 🎲 The stakes were high, but so was the potential reward. The gamble paid off, and Smith walked away with $27,000, which he used to pay for the much-needed fuel for his company’s planes.
Your own personal gamble
Have you ever found yourself in a similar situation, where you had to take a big risk to save your business? Maybe it was investing all your savings into a new venture, or taking out a loan to expand your operations. Whatever the case, taking a gamble can be both exhilarating and terrifying at the same time.
How did it pay off?
While not every gamble pays off as dramatically as Fred Smith’s did, sometimes taking a risk is necessary to propel your business forward. Whether it’s stepping out of your comfort zone, investing in new technologies, or entering a new market, taking calculated risks can lead to big rewards in the long run.
Practical solutions for taking calculated risks
Here are some practical tips for taking calculated risks in your business:
- Conduct thorough research before making any major decisions.
- Assess the potential risks and rewards of each opportunity.
- Seek advice from mentors or industry experts.
- Start small and gradually increase your risk tolerance.
Embrace the thrill of the gamble
While taking risks in business can be intimidating, it’s often necessary for growth and success. By carefully weighing your options, seeking advice when needed, and being willing to step out of your comfort zone, you can turn a gamble into a rewarding opportunity.
Share your story
Have you ever taken a big gamble to build your business? How did it pay off in the end? Share your experiences and inspire others to take calculated risks in their own entrepreneurial journey.
I agree that these stories are entertaining but they are also very uncommon amongst most successful business owners.
Contrary to popular belief most successful entrepreneurs are very risk adverse. For example, most people I knew early on viewed my decision to work for myself by building businesses as extremely risky.
However, I personally felt that the whole idea of betting on a career to take a person 20-30 years to a solid retirement to be a far more risky proposition. My decision to venture off on my own was extremely calculated and I ended up working a job for the first two years of my first business in order to ensure the business had time to mature before expecting it to pay me a salary.
^ Not a very exciting story but this is how it’s done 90% of the time.
So while we all have “war stories” very few will have similar “gambling” stories to this one that didn’t result in disaster. And frankly had Fred Smith lost the 5k instead of winning, he likely would have found another way to pay the bill or negotiate payment terms.
But that story wouldn’t have been nearly as glamorous.
That’s a fucking stupid gamble to take in my opinion.
For me I invested £40k into marketing in a year where Ithe business was still pretty fresh and wasn’t turning over much more than that. We lived off savings and taking a small salary.
It paid off OK in terms of jumping from around £55k turnover to around £150k but a few years later (now) I’ve sold the business and returned to employment because the stress was getting too much.
The 1.9MM purchase and working capital was kinda scary
Quit executive life for entrepreneurship. Almost lost all my money, but then made life changing wealth and never looked back.
I raised money using options trading. 💀
Was once owed 100k by a large client who was really dragging their heels to pay. 3 months late so I had to either sack a load of very gifted people or take a 20k loan out to pay salaries. Took the loan out, eventually got paid 6 months later, got more work, sold the business a year later and got shares in the larger business too. 👌🏼
I was awkwardly laid off from my job. I had some savings, a bonus of $7500, and 26 weeks of unemployment benefits. I also had a mortgage, wife, and kid. My business partner was all about going in full time on the business (granted she had no spouse, children, or mortgage to worry about). I’d say my biggest risk was taking the plunge. I spent my runway on learning how to be out on my own in the market as a matter of necessity. 2 years later, we’re slightly adding back to savings and looking to hire for the busy season.
Walked away from a six figure salary overnight to start my own events company 11+ years ago. (Big gamble #1)
I could argue I got lucky 75 more times in smaller ways throughout my events biz, growing to the 3rd largest in my broader market and 1st in my niche. You have to be. Right time right place, right meetings, right phrasing to the right person that moves things forward, etc. So much luck.
Then COVID happened, a stroke of bad luck, and I took the big gamble of paying my staff through it, full salaries, even though worked had stopped abruptly (no more putting thousands together in hotel ballrooms).
That gamble cost me everything because I thought COVID would end about 6 months sooner than it did. Ran out of cash, lost my home, everything. According to my advisors, I SHOULD have been greedy and fired everyone on day 1, I gambled on not interrupting several peoples lives over my own, took the gamble and lost.
Oh well, do it all again.
Anyone that doesn’t believe luck is a big part of both success and failure in business is kidding themselves. You can work harder than anyone, but still some luck needs to roll your way.
Our gamble was to stop working, move out of the country, and keep everything running as is. Been working better than expected for almost 2 years now. Business is up 60% YOY for Q1 this year which is amazing to see.
April 2020 i when all in in crypto as we where close becuase the pandemic it was avery very successful gamble very very happy with the results i keep paying my employees while we where close
Oh yes. I left a business to my former biz partner because he hired a consultant who was mean to me and also he wanted me to keep employing his “in laws” even though they didnt have the skills to do the job, were overpaid, and didnt come to work all the time. Business was making around 150-180k usd a month. I wasnt given my profit share for all of 2022 and I just left I was so pissed and our values didn’t align anymore. Like I didn’t want to see their faces it was traumatic. This “mean consultant” literally yelled everyday and had a very bad energy.
I built that business from the ground up (partner funded it and introduced me to certain industry players) so I knew I could do it again. So the whole 2022 I was only making like 100k in salary + an owners draw of around 3-5k a month.
Then I left. And just like that, made ZERO. Because I was angry.
My husband (then fiance) was so nervous. He thought it was careless. But he was never mad at me, he trusted me. He kept this to himself until I made money.
I pawned some jewelry and borrowed against my insurance, and took some copywriting revenue share side gigs. Needed around 15k a month to afford my new team and of course my living expenses.
I was doing my own nails this time and living very cheaply. Because my husband took over all expenses and gave me a credit card to use but honestly I was being very mindful. I even remember looking around the house for a lost hair band because I dont wanna buy a new one. I also remember wanting to start a small food business at home because it was easy money. Husband said no to this because it will take my focus away from the biz I was building. My sister lent me 10k and I paid them already with 14% interest.
I hustled. I worked 12-14 hrs a day tryna make things happen. After 4 months we broke even, and after 3 more months I was making 20k / month profit.
Now my new biz is thriving and I am sure we’re gonna hit our first million this year. Most of all, my heart is at peace. I love everyone I work with and we built a really good culture❤️😊And I was able to see how great this man I married is.
I started a software consulting business in 78, added two partners to help me build staff and manage projects. We were in the aftermarket of a growing database software vendor who “didn’t know the difference between the Rockies and the Sierra”, so we got leads from their sales people, who were looking for reference clients. We began building add ons to the vendor software and selling training to their customers. Things were going well. We had a sailboat together. We went out one evening and talked about our vision going forward. One wanted to sail off to Fiji. One wanted to be the Senator from Texas (we were in the San Francisco bay area). I wanted to build a business with long customer relationships, recurring revenue, in a defensible niche.
My wife and I were having our first child. I was finishing a consulting gig, had developed a lifecycle methodology, and we had developed an add on product. These guys were looking for a pump and dump. We were heading to Asia for our last vacation before we’d be busy raising a family.
I executed the buy sell agreement on them and cashed out. We went on a long vacation. When we returned, I started a new business that was competing with my old business. They hired some flaks from the vendor. I had enough cash for a year or so. I worked from the back bedroom. Over the next few years, we won bids with the state in Sacramento, the feds in Denver, gave onsite classes, and used the cash to build our first product. We bid it on a state contract, used the public domain deliverable as a base for a commercial product, funded sales and marketing from consulting cashflow. Over time, we became a software vendor with long term customer relationships. I was told at one point that I had a lifestyle business. Instead of trying to be Larry Ellison, I could be like Ray Dolby.
The two fools who cashed me out grew the company, but it was on the cash they were not paying to the State for payroll taxes, so they were shut down.
We had won the bid to provide independent verification and validation on the new payroll tax system over them by a few thousand dollars. We offered the minimum prompt payment discount (I think 1/4%). Our bids were based on rates that may have been the same, but we won by the prompt payment discount.
The real trick was to pay attention to details. One of my ex partners had a copy of my bid to the State in his desk drawer when they cleaned the desk out to sell it. The guy who was gonna sail to Fiji told me about that, as he was left holding the bag. I asked for his takeaway. He said ‘buy used office furniture’.
Wasted 20 years legalizing weed.
I’m now ten years on in not the cannabis industry and I absolutely hated figuring out what to do with my life at 40 and looking for a new career choice.
I had nothing in 2015 took a $2k loan from bank started by web design Agency business along with a Tech Co-founder. The relationship didn’t work out, in a year too many red flags 🚩 bought him out with all the money earned in the 18 months. Gave options for him to take all the team members who’re interested to move with him, every team member stayed with me. Despite he being full time and I was doing part time to run the agency after my work. Used to work 2 jobs for almost 3+ years.
From a design agency, we up skilled our team and transformed to an product development agency.
Moved in full time when the business was able to afford me in the end of 2018. Started scaling slowly by end of 2021 when the industry was booming hired a CTO this time with 23 years experience.
Who f***ked up big time he had good rapport with all the key accounts in our agency. He literally threatened the culture in the workplace and brought in fear that the business can’t operate without him, by this time most of the key accounts and projects he have been handling were going south.
Got into more of depressed state I couldn’t believe the place I enjoy being everyday was no more the same. No revenue culture is completely messed with wrong hires, favouritism with managers took over the credit of hard working team members.
I wanted to come out of the fear and face the situation, having known that the company will eventually fail anyway if I’m not going to act now. Gave him two months to plan his exit, flown to met our key accounts personally.
My client words when I mentioned my CTO is moving out “ Our confidence is shaken with this news”
Left them with a message if you believe this relationship worked just because of one individual and not the rest of 60 members who are in the organisation. You can make a decision. They decided to give us a chance and the relationship continues till date.
It took 4-5 months to recover. We retained all our key accounts and they even shared references to their network. We have been able to weed the wrong ones out and fixed the culture now.
One learning from all these years as a first time Entrepreneur. Don’t fear to make decisions when your gut says something is wrong.
I’m so happy all this happened in the early stages of the business. It made me and my team ready to handle any challenges we may face in the future. I lost the business literally twice and got it back to life.
More power to all the Entrepreneurs and team members who are currently facing similar challenges.
Took an 80k loan that I really dreaded, I was dead afraid but business was doing great and I thought I could scale with more employees so when a wealthy friend offered to give me the loan at a decent price I bit my lips and fearfully accepted. Turned out very well for me for as long as the niche was viable, almost 6 years and I made that money a few times back.
Left working in tech making 100k+/yr at 24 in 2021 to become an expat and start my own life abroad with savings and a massive ESPP
Haven’t looked back
I started a business in 2018 and almost had to close up in Feb of 2020 when all our clients stopped payments due to COVID lockdown.
We heavily considered looking for jobs, but my business partner and I decided to keep going. Our families lived off savings plus the government wage subsidy for about 6 months (literally the only thing that made it possible).
We used up pretty much all our savings (about $20k) but made it through until about July of 2020 when leads started picking up again.
Today, we’re still in business and have a team of 6! So the gamble definitely paid off!
In my infinite wisdom I decided to start a 3rd business (manufacturing) while running a software business and outdoor recreation park. Software business had a great recurring subscription model but I ended up getting bored (thanks ADHD) and jumping head into manufacturing sculptures…having never really made anything ever.
I ended up dumping all of the easy money from software into the manufacturing business…basically bled that dry along with the rec business and had to go all in.
8 years later I’m still learning and getting close to ‘figuring it out’.
I love the industry and type of work I’m producing, just between staff, huge costs, materials, learning curve…manufacturing is a complex business to be In.
Over purchased inventory to get a huge discount not knowing if we could sell it. Ended up selling it all within a month
I had to stay alive between 2008 and 2010 by using quite a bit of credit card debt
Resigned from my job. 3 weeks later my dad got sick. 12 days later he passed. Instead of finding a new job I dug in and started a company to help others organize their estate information so they wouldn’t experience the same problems my mom and I ran in to.
http://www.buriedinwork.com
The average estate takes over 500 hours to administer. I bet on myself, and it’s paying off.
My story, which is still being written, isn’t glamorous nor did my big gambles pay-off. Use this to learn and prevent making the same mistakes.
In 2018, at 30 years old, I left a $175k cushy executive job to join a cannabis startup as employee #3. I was in charge of corporate development and being the acting president of one of the subsidiaries. With the cannabis craze, I thought it would be stupid not to go all-in. So i took a significant paycut (received a healthy amount of shares) and took out a HELOC to invest even more in the business. The paycut came at a time when my wife was going on mat leave with our second child. It meant my paycheck didn’t cover our living expenses. As such, I had to eat at our savings and use the credit line. But we were going to go public in a year or two, be multimillionaires, so who cares. Wrong. Business experienced delays due to our CEO’s inexperience, bad decision-making, and mismanagement.
6 years later, and the business is still not break-even, has incurred a significant amount of debt, and my equity is practically worthless.
I left the company in 2022 because I needed to cut my losses.
In 2022, I started doing consulting. A client of mine wanted to start a business. It seemed like a great concept, and she wanted my help on the execution and planning. So, (insert San Andreas meme here) I did it again. I put in about $30k from the credit line, got the business to break-even, and then, that’s it. Couldn’t figure out the supply chain issues to reduce the costs significantly enough for our customers to want to buy. We couldn’t get product-market fit. Decided in early 2023, that I needed income to support my ever increasing debt and family of 4. So, I got a cushy job and collected my paycheck to start paying down some debt and get some discretionary income (took some family vacations, bought a PS5, put kids in sports, etc).
During this time, my partner, who basically had all the time in the world to spend on the business, decided to just let it die. They literally stopped doing any marketing, and any of their responsibilities. They were too busy going on trips and enjoying life (the business wasn’t even close to their main source of income, they had a recurring cashflow from another source). This taught me a valuable lesson, your business partner(s) are key.
Anyways, back at my salary job, the unthinkable happened. Lay-offs at the company due to some terrible planning. I was a casualty. First time in my life that I was laid-off or fired. For the first 10 seconds I was totally inconsolable, but then I moved on. Decided, this was a perfect time to really come up with a business that will use all of my learnings and experience, and get that going.
So step 1, got another salaried job. But with reduced responsibilities, so I can work part-time on the biz.
Step 2, build in silent, and with as little investment as possible. I’ve only spent $1.5k, and we are launching next week.
Step 3. Ensure the business is first sale profitable and product-market fit is there before investing anything beyond. Our first sale will get us enough capital to fuel our next 2 sales, which will fuel our next 4-5 sales, etc. It’s a luxury business, so high ticket items with great margins.
Step 4. Take calculated risk and risk management the shit out of the business. I’ve reduced the risks as low humanely possible, and I’m still searching for more risks.
Step 5. Pay off all my debts with the initial cashflow of the business.
This is still being written.
Edit: spelling.
Besides driving to Reno with the sole purpose of winning enough money to pay rent? (I did.)
I was unemployed and wife pregers, went into biz with a family member. It took all of our $150K saved in IRA to keep the biz open. I worked for basically min wage for 3 years, but I was able to repay myself for the loan I made to the company and we lived off of that.
12 years later, we had 4 companies making $250M / year total. Sold the first one and I retired at 45. The others were sold over the next 10 years.
I haven’t taken any big gambles like that, but I’d love to hear if you have any personal stories like that!