Risking Your Business To Make Money
Have you ever decided that you were going to take charge and make your business happen, come hell or high water?
Well, sit back with a coffee, my friend. This story’s for you.
Some years, the bitter cold of
Other years, the weather is warmer and the icy highways don’t appear until late January or February. Ice fishers lament, and cars take the long way around to cross the bridges to get to the other side of rivers. Tourist outfitters suffer, lacking sufficient solidity to support their outdoor activity.
Ice is an unpredictable creation of nature, though. A winter with cold snaps followed by heat waves creates dangerous ice. You can see it, you can touch it… but it’s poor in quality and the thickness to support weight isn’t there. Or it builds up in layers, looking solid and being anything but.
Well, one man from the city decided he was going to become an ice-fishing outfitter. He had a prime location and the potential clientele. He had a specialty, too: ice-fishing for handicapped people. He bought some shacks, fixed them up nice with a coat of fresh paint and installed stoves.
Last year in 2007, the ice came late. That outfitter depended on solid ice for 12 weeks from the beginning of January almost to April to earn his living for the year. He only got 5 weeks under his belt. He’d hoped for the best and planned for the best, too. He didn’t have a Plan B, and the optimist in him was hurting for money.
Well, 2008 was promising a good, long Canadian winter and Mr. Outfitter was pretty pleased. He figured he’d recoup his 2007 losses and get back on the path towards success.
But Mother Nature had a different kind of winter in mind. Lots of snow and moderate temperatures kept the water flowing and the ice thin. Sure, the river froze, but the bulk of snow prevented any Canadian fool to go drive out on it.
Mr. Outfitter started to get nervous. He could already see this wasn’t going as planned. The winter got worse, combining heavy snowfalls with warm weather and all that happened with that ice was a buildup of layers of porous, crunchy stuff.
Still, he could walk on that ice. He could even drive on it, too, nudging his big Ford out slowly. Hell, he was going to take a chance. It was high time to get rolling and make some money. Mr. Outfitter hooked up a cabin onto his truck and pulled that shack out onto the ice.
Well, the locals, they’re always wise. Old men with experience stand around and tsk away at what the youngsters do or what the city folk think they’ll get away with. They warned the Outfitter, but he was from that fancy city of his, and he wasn’t having any farmer telling him what to do. He was going to make his business work for him – watch and see.
Watch and see they did. That Ford went through the ice, breaking through and leaning into the murky water. The only thing that saved it from a full dunking was the snow shovel on the front. It hooked on the broken ledge of ice and held that truck up from sure drowning.
The Outfitter? Oh, he got out just fine, with only a wounded pride. He shuffled on back to shore with wet boots, and called up one of them local farmers to come pull his truck out of its grave.
No luck, though. The locals were smarter than that. Why should they risk their tractors and Fords to haul up a truck for some fancy-pants from the city who wouldn’t listen in the first place? No sir, they’d done warned him, and he could figure out his own problems.
It took one semi-trailer tow truck, two 10-hour days, three broken chains and over 2 grand in fees to pull that truck out of the river.
How does this relate to your business? Think of it this way: You can learn from those who’ve walked before you and keep your truck in decent shape, or you can rush out onto thin ice and risk going bust.
7 Responses to “Risking Your Business To Make Money”
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I’ve seen many friends and acquaintances start businesses and fail. The most foolish thing several have done is extend credit to get a big, big sale. In one sad case, my friend put his house on the line as guarantee for a loan he took so that he could sell a big pile of stuff to another company.
That company went belly up and bankrupt before paying him. My friend lost his house and his business.
I won’t extend credit that I cannot afford to have go bad. It’s forced me to turn down some really attractive opportunities now and then, but I just am not going to risk it.
Hi James – This is a great story. And I suppose Mr Outfitter didn’t take the risk because he’d weighed up the odds. He took it because he was desperate and that can be more like gambling.
It’s fine to take risks that other businesses haven’t, if they’re calculated risks. But that guy didn’t consider the worst thing that could happen, because as well as sinking his truck, he’d ruined his credibility. How could he be trusted to provide safe activities for the disabled after taking a risk like that?
My last business depended on the weather a lot because much of it was flood restoration work. And I have to say, I would never have another business which depended upon something as unpredictable as the weather again.
He took the risk for a few reasons: He was desperate. He thought he was immune to failure. He thought the experienced, seasoned locals were just skeptical of his success. He thought they were jealous. He considered what they said and didn’t believe them – he thought they were just caught in a rut and too stuck in traditional ways. He thought his plan was foolproof and that everyone didn’t believe he could go through with it. He didn’t want to listen to other people.
He hurt not only his business, but you’re right – he affected people’s perception of all ice sports and their safety. He hurt the regional tourism industry. Trust in his affairs was broken, trust in all outfitters was harmed.
It’s interesting how it relates to online business – with new businesses cropping up all over, do the owners listen to what other people are doing and saying, or do they seek to be different? And at what cost?
You can learn from those who’ve walked before you and keep your truck in decent shape, or you can rush out onto thin ice and risk going bust.
James,
I laughed out loud when I read the moral of the story, Then I went back and read it again. SO well written (but then that’s what you do for a living!).
To be just slightly contrarian:
I’m not the risk-taker that Mr. Outfitter was, but I do believe that with research and planning behind you it’s worth being an Innovator. Mr. Outfitter had research (in the form of “interviews” with experienced locals) available to him and ignored it. That can only make you Steve Jobs, or a fool.
One of my favorite quotes is from Henry Ford, who said:
“If I had asked people what they wanted, they would have said faster horses.”
I’m finishing a post on this very subject right now. No, I don’t think making a jump without a net is a good idea. Neither is getting caught in the net.
A lot of businesses fail because naysayers convince them into being too cookie-cutter, and being one of a million is its own serious risk.
Regards,
Kelly
Good point Kelly. Like Seth Godin says, it’s more risky in business to be safe and average. Heck, this guy might have given a somewhat bad image to the industry but let’s look at the positive aspect of what he did (for himself). He gained exposure by being stupid. If he never did that, I would have never heard of him. He could write a book – maybe entitle it “How I got 10,000 bloggers to blog about me.” The trick is, how can he capitalize on his 15 minutes of fame?
I think good entrepreneurs examine the past and listen to what others have to say (especially if they are experts in the field). However, they are the business owner (just like when I flip a house I will listen to my contractor but I’m ultimately the investor and knows what’s best to turn a profit). They weigh it all and then make their own decisions. This guy obviously subscribed to the blog that says “the greater the risk, the greater the reward.” The problem is, he was dumb!
Good post James. I enjoyed it.
@ John – The art of capitalizing on 15 minutes of fame… and the ends justify the means? Something to think about there…
well . . . not if you’re dead! hehe