Gamble or Calculated Risk?

I was riding home in an airplane sitting next to a gentleman that was in the finance industry. We chatted a bit and I mentioned something that my Dad had said quite often: "Boy, the Campbell clan is a strange lot; we learn to do things right by doing them wrong first".

My new airplane acquaintance said that many times people learn the hard way about investing as well. I mentioned a couple other things my Dad used to say, and he said that I ought to write a book about the things I learned from my Dad.

I don't know that I could write a whole book but I can do a blog post every now and then.

But this nugget of truth from my Dad, applies to business, marriage and life in general.
"We learn to do things right by doing them wrong first."

Many successful business owners had a few failures along the way. I bought an old movie theatre in a small town in 1979; Jimmy Carter was president. Interest rates went to 21% - business went south and I went broke. Cable TV came to town, and had to file bankruptcy. I learned a very valuable lesson. When interest are at the highest levels don't borrow money on something you have no experience in or something that has no proven track record of success. That is gambling.

Gambling on a business hoping to win, can wipe out your whole life's savings.

That is very different from a calculated risk. If you know the business, know what to expect, and don't mind losing but you are pretty sure you'll win, and you're willing to work you butt off to make it happen -that is a calculated risk. In other words you have calculated (or added up) the cost, the risk, the possibilities, and you have planned well.

I have seen it happen over and over. Someone starts a business in an area they are not very familiar with; for example a restaurant or a resort. I personally know people who took their whole savings from years of hard work - cashed out their 401K, and invested that into a business they had never been in before.

Dad said. "Son if you can't tell the difference between glass and diamonds - don't buy a jewelry store."
Also he said, "A fool and his money are soon parted."
One day I told my Dad I was thinking of buying a restaurant. I told him the guy who owned it said he was making good of money with it. Dad said, "If you can't cook, don't buy a restaurant - the cook will quit and you will have to do the cooking. So if you can't cook very well, the word will spread quickly, and you will quickly go broke."

How true.

If you started your business over would you have good ideas for bringing in customers, and a little Pizazz?

Wizard of Ads Partners specialize in bringing to you both of those. See the list of Partners on the right side in the column.

Perhaps now would be a good time to have a complimentary meeting with a Wizard of Ads Partner. Links to their websites and blogs are listed down the right side of The Wizard Times. Hundreds of their articles with free insightful advice can been seen at 2010 would be a great year to attend a class at the Wizard Academy 21st Century Business School in Austin Texas. What is the Wizard Academy?

See you next week.

Clay Campbell
Wizard of Ads

PS. Need help to attract more customers and grow your business?