I have been doing a lot of reading on the internet today, particularly blog posts about entrepreneurship. I read a really broad range of posts by a lot of different people and one lesson or theme kept coming up in different ways among all of them, it stuck in my mind and prompted me to look at how I did things.
The theme or lesson that was so important is when to pull out of a project or investment, learn your lessons, celebrate your failure and move on to the next thing. Even when we know we shouldn’t continue with it, we still do. It can become a bit like a gambler chasing losses by making more and more bets on the same horse.
One post had a great analogy about an old car, I can’t remember it exactly but it’s a good one and most people will be able to relate to this: You have an old car that you are considering trading in or selling so you can get a newer one, it has seen better days and it’s getting a little unreliable. Then just before you have a chance to sell it the car breaks down and it needs some work. You can’t sell it as it is so you pay to have the work done and decide now you have spent the money on it you might as well use it a bit longer to get your money’s worth from the repairs. Then a few months later it breaks down again and you start thinking you have to spend the money on the new repairs because you have just invested in some other work a few months ago and so it goes on, throwing money at it until it dies completely and you have to buy another car anyway.
Most investments can be looked at in the same way, never think about what you have invested in something (time, money, effort), only think about what it is TRULY worth today in the open market and base your decision on whether or not to continue with the investment on that current valuation.
First time entrepreneurs and business owners often make this mistake; they want to make a million and be successful from “project one”. They throw everything they have at “their baby” even when it’s sinking so when it does finally go under they literally lose everything. Many people don’t realize (or choose to ignore) that most of the best entrepreneurs had at least a few failures before they found success. Sometimes there is no other way of learning than from doing and failing then doing it better next time. What I learned about myself and how I do things is that I like to juggle at least two or three investments or projects at the same time so I am not totally focused and reliant on one single investment. This enables me to stay emotionally detached and maintain objectivity when looking at my projects. I can then cut one loose if it isn’t working out without losing too much sleep and I still have my other investments running. When I have time to analyze what went wrong I can decide if I should forget it completely and concentrate on other things or whether to restart the venture in a different and better way using the lessons I learned the last time.
I don’t want to put anyone off from starting out as an entrepreneur, starting a business for the first time or making a new investment is a great thing to do, don’t be overwhelmed just do it. The most important thing is to get started and there’s no need to run before you can walk so don’t think you have to juggle half a dozen ventures from day one. However don’t be afraid to fail first time and try again if you have to. If you have the confidence follow my example and spread your risk so you can stay objective.
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