I have a professional background in risk management.
(just hold on this gets interesting just in a bit)
From that world, probably one of the most useful frameworks I came across is the difference between inherent risk and residual risk.
In plain terms:
Inherent risk is the raw risk of something before you do anything about it.
Residual risk is what remains after you factor in all the buffers, controls, and cushions you have around you.
(simple but powerful approach to decision making)
So what does that mean is that the same risk looks completely different depending on how much of a safety net exists underneath it.
And that applies to us as individuals just as much as it does to organisations.
Think about it:
Two people can be facing the exact same challenge objectively, starting a business from scratch, leaving a stable career, betting on something uncertain, yet their residual risk levels are completely different, because their starting points, their savings, their support systems, their safety nets are not the same.
This is also where I think a lot of entrepreneurship stories get a little too polished.
It feels like nobody really wants to talk about the starting point money wise, as if everyone begins from the same figures.
Pretty sure they do not.
In any case, and regardless of the numbers you start with, there are always other sacrifices as well when you decide to go after something new and risky.
Sometimes those sacrifices can in relative terms even outweigh whatever financial safety you have.
So in this episode I wanted to share my honest reality of building a takeaway drink business from the ground up, or at least trying to (the location search is not a piece of cake let me tell you..):
What my starting point actually looks like,
what the safety net is,
the privileges that make it possible for me,
and the sacrifices and risks that come with it regardless.
Every Sunday I publish an episode of The Build, a series following my journey of building from scratch and more than anything trying and learning. In the previous episodes I shared the story of how I got to entrepreneurship, what the reality of running a side business alongside a full time job actually looks like, how the failures are an inevitable part of the journey, how the first months of building Unelma have been, what the brand strategy behind it looks like, and what it actually takes to manage yourself when no one else is telling you what to do. In this one I dive into the personal risks, sacrifices, and privileges that are inherently part of building a business.
On Wednesdays, I write about creating your path, style, mindset and career wise. I would love to have you follow along!