How much risk determines whether to start or continue a business?

That may seem an odd question. After all, wherein lies the risk of starting a new business, if not with money, and how much? And in fact, there is a start-up investment, but in the case of most micro-businesses, start-up financial costs are generally minimal. The funds needed to buy a laptop, a router, and a printer, are  more often than not, less than $1,000. You will likely need some software. Yet even Microsoft now offers its Office 365 suite of applications (including Word and Outlook) for well under $100 a year ($60 at Costco), and that includes automatic upgrades when new versions come available. You can find accounting software free on the Internet at such sites as WaveApps. Your cable company can provide you reasonably-priced Internet access, if you don’t already have it. Certainly you already own a  cell phone, which nicely supplants the need to add a landline telephone. Not surprisingly, many small businesses no longer use a landline, having opted to use their cells for all business, and personal purposes. There can be, of course, other ancillary costs such as licenses, proprietary software applications and insurance, if required by your business type. And while they can increase the amount of money you will need for your new business, it’s unlikely they are deal-breakers.

So if financial risk is low to begin with, what other risks can there be? Two immediately come to mind: prior investment, and time.

Example of prior investment can include the cost of a 4-year (or more) degree, certification training, or other programs that prepare you for a chosen career, or business path. Those costs are not only measured in dollars but in study, personal sacrifice, and usually a second job to defray the cost of your education. All play a part in determining the value of your time.

And what about the value of your time? Time, and the energy expended making that time productive and useful can well be the largest risk you will face. (If you doubt time has value, read Kevin Kelly’s wistful take on the value of time).

Those years in college? The time you spent quite possibly learning the things you needed to know to start your new business? Or that extra eight hours, or more, you spent daily away from your family working that “day” job while getting your new enterprise up and running? Can you ever get that time back?

And, if after a few years struggle to get and stay above water your business fails, you have lost the time you might have spent on some other successful business or endeavor.  Yes, there is the philosophical viewpoint that success is built upon previous failure, though I’m not altogether certain that mitigates the risk.

Look, I can load up this post with any number of examples of time-value risk. But that’s not my intent. My motivation lies in the fact that there are many inherent risks that don’t include money. And very often the expenditure of time (and its value) is not considered. Indeed, the value of time is often not seen as a factor until there is much less of it left.

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