Entrepreneur 101: Distributing Risk
What is Distributing Risk?
According to insurance terms, The distribution of risk mandates that enough independent risks of unrelated parties be pooled to invoke the actuarial law of large numbers.
I’m not sure what that means, but when it comes to being a freelancer or an entrepreneur, you’re always distributing risk and risking everything all at the same time. The concept for me means: not putting all your eggs in once basket.
Distributing your bets into more than one income stream.
Most freelancers will tell you that they have more than one income stream. Considering that most freelancers do not have a fixed contract or stream of income, it makes sense to then have many or as many streams of income as possible, to reduce the fatal outcome of no income at all.
Running Milled is one form of income for me and Third Planet Digital is another, and within each brand, is several service offerings, again distributing the risk of missing an opportunity to make income.
Focusing and Specializing:
A lot of successful entrepreneurs will mention that you should focus and specialize. This is good advice, once you’ve touched a niche that you can consistently rely on to make an income from.
This would be the ideal outcome for an entrepreneur. A freelancer then becomes a business owner, as they need to hire more people to leverage that niche further.
Yes, right now, Third Planet Digital has a range of service and product offerings, everything from social media training to data analytics and reporting, but the idea is to survive long enough to develop a specialization to become the authority in a field.
Milled, similarly, is closer, starting as a gaming blog, it’s better termed as a publication where Millennials find cool stuff that matters to them, or entertainment (see, still figuring it out), but the point being, the simpler the tagline, the easier it is to sell advertorial and blog writing services to clients and brands.
In the early days, like now, it’s seriously about survival, what can I do to make money to eat. Yes, it’s not easy and no, not every day will be great, not every month will have the money you need and a lot of the time, you’ll fear everything falling to pieces.
But how is that different from the fear of losing your job when you fuck up or having more debt than salary at the end of each month.
Friends, whichever your choice, ask if it’s right for you, both lifestyles have pros and cons, and yes, maybe my entire vision and business burns to the ground, maybe The Joker is right, and I’m one bad month away from being on the street.
But maybe, I’m one month away from the first Fortune 500 client that I’m working toward. The brand that gives me the chance to do the best work I can and fulfill my dream of a successful business.
Until then though, distributing the risk is the name of the game and survival is the rule.