Risk and running your own business

You know I try and make a point of chatting with cab drivers.

Yesterday’s pick up from Harley Street to Paddington (it was pouring down – OK?) had to turn up his hearing aid to answer my questions.

It turns out he has been driving a London black cab for 49 years this year.

I asked “will you be retiring soon?”

He answered “I can’t retire because I’ve always loved gambling but I’ve never been very good at it.”

It strikes me that there isn’t a lot of difference between the risk of gambling and the risk of running your own business:

1. It can be huge fun (and superficially glamorous) whilst you are doing it

2. You have to be prepared to take a calculated risk

3. It won’t always pay off

4. Losses will occur and you have to know how to cope with them

5. The bank will win more often than you do

6. The single biggest strength is knowing when to stop

So here are two business tips for the day.

1. If you are on a winning streak – it won’t last forever – decide now when you are going to walk away from the table

2. If you are on a losing streak – accept the losses and walk away from the table before you lose any more

In conclusion, whether its a Casino, your Business or The Stock Market, it makes huge sense to establish the circumstances (good or bad) in which you intend to exit.

Get it wrong and you’ll still be driving into your dotage.

Place your bets.