Nobody likes the uncertainty and stress of going out on a limb and (let’s be honest) putting your business at risk. But making the safest bet rarely leads to success. Tom Panaggio shares 10 excuses that keep you in your comfort zone—and missing great opportunities.
Tampa, FL (November 2013)—Small business owners, can you relate to these scenarios?
– It’s time to open a second retail store branch—and you fully intend to—but you’re not quite ready yet. You found a possible location but it doesn’t seem perfect, and besides, you’re not sure if the local marketplace conditions are right. Maybe next year would be better.
– You’re ready to expand your customer base—almost. However, you’re certain it can’t be done without buying and mastering a certain software program that lets you personalize your marketing efforts. And since you’re not ready to do that yet, you’d better hold off.
– Yesterday, you met the best natural salesperson ever. Instinctively, you know she’d be perfect for your team and she hinted that she might be in the market for a job change. You’d love to hire her, but the time doesn’t seem right to hire a new person—money is tight and you’re far too busy to go through the hiring and training process right now.
These hypothetical owners may think they’re just avoiding unnecessary risk. But if you read the scenarios again—and if you’re honest with yourself—you’ll have to admit their reasons reek of excuse making. And here’s the real problem, says Tom Panaggio: Risk avoiders are also opportunity missers.
“When you’re in charge of running a company, it’s easy to convince yourself that playing it safe is the responsible choice,” acknowledges Panaggio, author of the new book The Risk Advantage: Embracing the Entrepreneur’s Unexpected Edge (River Grove Books, 2013, ISBN: 978-1-938-41644-6, $14.95, www.TheRiskAdvantage.com). “Especially if your business is new, going out on a limb is the last thing you want to do. But risk is needed if you want to do more than just scrape by—and it may be needed just to survive in this economy.
“Hoping that sales will get better or that conditions will improve is the wimp’s approach,” he adds. “You can’t wait for everything to be perfect because it never will be. You have to take action—in other words, accept risk and make those things happen.”
Panaggio knows about risk firsthand. Along with several partners, he has created and built two successful companies: Direct Mail Express (which now employs over 400 people and is a leading direct marketing company) and Response Mail Express (which was eventually sold to an equity fund, Huron Capital Partners). As those companies have adapted to a shifting marketplace and an uncertain economy, Panaggio has had to take numerous leaps of faith.
“Even with the best attitude and plan, there are times in every business when, as progress slows, confusion sets in,” he explains. “You may feel frozen and afraid that any move you make will be wrong. However, if you don’t want to stagnate, you have to move. Unfortunately, this type of risk is the most difficult one to take. You’ll probably want to find ways to avoid action, which is tantamount to sinking your own ship.”
Here, Panaggio helps business owners identify the risk avoidance that may be holding them back by highlighting 10 of its most common forms:
Excuse # 1: “The timing isn’t right.” As a young commodities broker right out of college, Panaggio recalls receiving a call from a client named Steve each morning. Steve was, as Panaggio puts it, a “prisoner of hope” who always asked the same question, “Where is gold this morning?” When gold was higher than the day before, he’d comment, “Ah, missed it again.” If it was trading lower, he said, “Let’s wait and get it at the bottom.” Steve missed the biggest increase in gold in over 50 years because he waited for the exact moment to make a move, and based on his perception, that moment never came.
“All over the country, there are entrepreneurs—or wannabe entrepreneurs—who are just like Steve,” Panaggio confirms. “Business plans sit in boxes or on hard drives as their creators wait for the right conditions: funding, free time, better economic conditions. And plenty of existing businesses remain less successful than their owners would like because those very same owners are hoping that tomorrow conditions will be just a little bit better for advancing their goals.
“Also, keep in mind that being a ‘prisoner of hope’ doesn’t just apply to growth,” Panaggio adds. “Besides forgoing an opportunity for success because they are waiting for ideal conditions, many leaders fail to solve problems or correct mistakes because, in their minds, the timing wasn’t right. And when you’re bootstrapping a business, a mistake can be even more costly than not leveraging a chance for advancement.”
Excuse # 2: “I tried that once, and it didn’t work.” According to Panaggio, those words are most often uttered by small business owners in reference to marketing. Perhaps you’ve been there: You allocated a large part of your budget to producing a television commercial, for instance, but barely noticed any increase in your business. Or maybe you offered an online deal to new customers, only to realize that the discount you advertised was a little too generous and wouldn’t allow you to make any profits. Your one-time marketing failure has convinced you not to try again.
“Yes, marketing is far from certain,” Panaggio acknowledges. “It can be expensive, and it’s hard to accurately predict what customers will respond to. But without proactive long-term and consistent marketing, businesses die. Avoiding investing in marketing—or even cutting back on it—because one campaign didn’t produce the desired results is a risk you can’t afford to take.”
Excuse # 3: “If I just had XYZ gadget…” “If I just had faster computers, my team could respond to customer emails on a more timely basis.” “If I just had the latest supply chain management software, my company could fulfill orders more quickly.” When you’re an entrepreneur, there are a million “If I just had…”s, and often, they center around technology. Remember, though, you can spend forever waiting on the next best thing—and often, says Panaggio, that “next best thing” isn’t as necessary as you thought.
“On the infrequent occasions when the Internet in my office goes down, everyone has one concern: ‘What should we do now? Go to lunch?’” Panaggio recounts. “My answer is always this: ‘If you were on a deserted island with no supermarket, would you just let yourself starve, or would you figure out a way to survive? You may not be
online, but your phone still works. Pretend the Internet hasn’t been invented yet and call a few customers. Survive.’
“My point is, by viewing technology as a necessity, we create our own prison,” he states. “We no longer use it as a tool. Instead, we are trapped by it. Remember, the road to success is through
action, not accessories. Countless success stories have been written with nothing more than ink and paper, a rotary phone, and plain determination. While tools, technology, and accessories might be helpful, they do not guarantee success. Effort guarantees success—you have to keep your foot on the accelerator longer and more often than your competitor.”
Excuse # 4: “I’m still working on the plan.” Let’s say that you want to move to the next level, whatever that happens to be for your business. So you begin planning, preparing for every possible scenario. You define contingencies with backup plans full of redundancies. You sometimes wonder how anyone could fail with a plan that covers all possibilities and that offers each a solution. But here’s what you’re not taking into account: While your perfect plan might prevent you from failing, it will also hold you back from succeeding if it’s never executed.
“To be absolutely clear, planning is a good thing,” Panaggio clarifies. “However, for many entrepreneurs, the solution to avoiding the risk of reality is to keep planning. After all, they tell themselves, you must have a plan to be successful; ‘winging it’ is a blueprint for failure. The fact is, with planning as a comfort zone, you can easily replace the reality of execution with theoretical forecasting and ‘what-if’ modeling. For that reason, many risk-averse entrepreneurs miss opportunities and fail to build actual businesses in the act of building virtual businesses. Don’t make that mistake.”
Excuse # 5: “It’s a good idea, but circumstances have changed.” “I was ready to pull the trigger, but then the market changed and I had to reassess.” “I had to set back the original product launch date because I was just too busy to get everything ready.” “Preliminary research showed that this idea might not be as lucrative as we thought, so we scrapped it altogether and went back to the drawing board.” Sound familiar? If so, you may be moving the target.
“Basically, moving the target changes the objective, goal, or focus of your business and thus delays plan execution, innovation, or change,” explains Panaggio. “In other words, it means changing your plans every time you lack certainty or just don’t have enough motivation to move forward. The problem is, each time you move the target you have to stop and prepare to fire again. It’s possible to spend an indefinite amount of time making excuses in this way without ever accomplishing anything.”
Excuse # 6: “I’ll get to it eventually.” In his book, Panaggio tells the story of a salesperson who did extensive research on each sales lead she got. Some of her research files contained more than a hundred printed pages of material. Her reasoning? She wanted to know as much as possible about a potential client before she called them. On the surface, this level of dedication sounds admirable. But according to Panaggio, the salesperson in question was really procrastinating in order to put off the moment of truth. She was afraid of being rejected after making her pitch, and her research was a form of risk avoidance.
“A similar scenario plays out with business owners every day,” Panaggio states. “No, you may not be making sales calls, but there’s no shortage of delaying tactics that can be used as a buffer between you and risk. As an entrepreneur, you have to stop telling yourself the lie that you’ll ‘get to it eventually.’ If you immerse yourself in busywork in order to avoid the true priorities, your business won’t last long enough for you to tackle them at some undefined point down the road.”
Excuse # 7: “I’m playing a defensive game.” The hardest risks for cash-strapped entrepreneurs to take are often financial. Many business owners choose to cut costs and (at least attempt to) do more with less when what they really need is to hire new talent, invest more heavily in marketing, upgrade their machinery, or something else.
“Unfortunately for many owners, no business achieves greatness solely by pinching pennies—although financial responsibility is certainly a big part of sustainability and growth,” Panaggio comments. “The truth is, you can save your way to mediocrity, but not success. So don’t tell yourself that you’re playing the game if you never come off defense. Nobody ever wins without picking up the ball and running ahead in spite of obstacles.”
Excuse # 8: “Nothing’s broken; why fix it?” When you’re facing a crisis that could damage or even sink your business, it’s (fairly) easy to take risks. After all, if you don’t act, you’re doomed—and in that situation, there’s probably not much to gain by holding back. But what about the times when things are going smoothly, when you may have more to lose by going out on a limb? Well, then it’s much easier to convince yourself that there’s no need to tamper with the status quo.
“When nothing is actively going down the toilet, it’s easy to tell yourself that things are fine, that the future is rosy, and that you don’t need to put yourself out there to improve,” observes Panaggio. “However, that kind of thinking is a good way to be left behind or to become irrelevant. Customers don’t always leave because they had a bad experience with your company…the reason is often that they simply had a better one with someone else. Remember, risks need to be taken when business is good and bad if you want to stay cutting-edge and competitive.”
Excuse # 9: “…<crickets chirping, dust falling, grass growing>…” That’s the sound of silence. You know, what you hear when you decide to let a project or initiative die over time instead of doing what’s necessary to bring it to fruition. Whether you simply lack motivation or your surrender is fear-driven, your risk-avoidance behavior may be taking the form of lack of follow-through.
“For many business owners, the desire to succeed is there—and so are some good ideas—but they struggle with making the rubber meet the road,” comments Panaggio. “Maybe you’re afraid of being held accountable if you don’t meet expectations, or you simply find that you don’t want to put in the extra effort, after all. So you sit back and let projects peter out instead of driving them forward, or definitively putting them out of their misery. (You may even be fooling yourself into thinking that others don’t notice that you talk a big game but don’t deliver.) Don’t allow your mind to sabotage your desire to meet your objectives.”
Excuse # 10: “But I don’t avoid risk!” Even if you, the business owner, have conquered your fear of risk and move into uncharted territory without hesitation, Panaggio warns that progress paralysis might still be affecting your company through the actions (or inaction) of your employees.
If you as the owner don’t, well, take ownership of your team’s counterproductive behaviors, you could miss out on a lot of opportunities.
“Your salespeople might be stuck in the comfort zone of creating safe, but boring, pitches, for example, or your ad designer might be creating a backlog because she’s a prisoner of perfectionism,” he posits. “If that’s the case, maybe you’re simply so focused on leading your business that you haven’t kept a close eye on its inner workings, trusting your team to be as bold and efficient as you are. Or, more likely, you have noticed risk avoidance behaviors that are slowing your organization down, and are simply reluctant to confront your employees—a form of risk avoidance in and of itself!”
“Risk avoiders live in a false reality,” Panaggio concludes. “The temporary comfort you gain from rationalizing your inaction just postpones the inevitable. Hoping that something will change will result in defeat, the end of your dream. Success comes only via constant forward progress, which requires making something happen. As a leader, your example of enthusiastically seeking opportunity to execute, improve, and deliver results will be the beacon that guides all who follow you. So stop avoiding—and start acting.”
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About the Author:
Tom has enjoyed a 30-year entrepreneurial career as cofounder of two successful direct marketing companies. As a result, he can give a true perspective on starting and running a small business. His practical approach to business concepts and leadership is grounded in the belief that success is the result of a commitment to embracing risk as a way to ensure opportunity.
In 1983 he cofounded Direct Mail Express (DME) in Daytona Beach, Florida, with his siblings Mike and Kathy. DME has always been on the leading edge of marketing technology and is still recognized as an industry leader in personalized digital marketing.
As CEO of spin-off RME in Tampa, Florida, Tom headed a company that created the most effective lead-generation program in the financial services industry. RME revolutionized financial services marketing with its Seminar Success program, a marketing system that has created billions in sales for their clients.
Originally from Rochester, New York, and a 1980 graduate of St. Bonaventure University, Tom has always been involved in athletic competition. With his father, Mauro, being a successful basketball coach, that game has always played an important role in Tom’s development. He was also a member of the St. Bonaventure varsity soccer team.
Tom was introduced to the idea of embracing risk as a young commodities broker in the highly speculative world of futures trading. Before packing his belongings and relocating to Florida, he worked a season in minor league professional basketball where he learned the value of maximizing resources and being able to take on multiple roles within an organization.
In Daytona Beach, Tom was introduced to sports car racing while attending an event at the Daytona International Speedway. He was immediately drawn to the excitement and competitive nature of car racing and obtained his racing license. Even while pursuing this new passion, his entrepreneurial instincts played a role. He recognized a unique opportunity and started a company that rented race cars to those who wanted to race but lacked the skills and time to prepare and maintain their own car. He has had the privilege of participating in two of the great sports car races in the world—the 24 Hours of Daytona and the 12 Hours of Sebring—as well as the Sports Car Club of America’s national championships.
Today Tom lives in Tampa with his wife, Shemi. When he’s not speaking or advising entrepreneurs and small businesses, he’s spending time with his family—his three daughters, Ashley, Christine, and Elizabeth, are all pursuing their college degrees—or he’s out on a racetrack.
For more information, please visit www.TheRiskAdvantage.com.
About the Book:
The Risk Advantage: Embracing the Entrepreneur’s Unexpected Edge (River Grove Books, 2013, ISBN: 978-1-938-41644-6, $14.95, www.TheRiskAdvantage.com) is available at bookstores nationwide, from major online booksellers, and at www.TheRiskAdvantage.com.