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Business Savvy: Managing Risk In The Business Of Pro Audio
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Many of you have dealt with the ups and downs of the pro audio industry for many years and understand the constant ebb and flow of risks and opportunities.

Others may be new to the business, working part time, or on someone else’s payroll. Still others may be planning to go on their own or “quit your day job”. In any case, you are managing risk in some way.

What’s at risk in business? How do you feel about risk? Are you ready to pursue live sound full time on your own from a business standpoint?

ASK YOURSELF THIS…
It’s a fact: any business involves risk. Risk is the possibility of danger, loss, or some other negative consequence. In any business ­ whether you work for yourself or someone else ­ your time, money, reputation, and self-esteem are at risk. Let’s look at each of these briefly.

Time. You may spend a lot of time learning new skills (technical chops, business chops), establishing relationships, and working at the audio business before you achieve your financial or creative goals. How much time do you have? Can you afford to take time away from other things? Are you patient or impatient by nature?
Money. Starting and operating any audio business requires working capital ­ cash. Do you have enough? Are you willing to put your own money at risk? If yes, how much? If no, where are you going to get the money?
Reputation. Your reputation is what others say about you, your character, and your accomplishments. When you operate a business, whatever you do both in your business and in your personal life is subject to public scrutiny. How do you feel about that? Are you open to praise and criticism on a regular basis, or are you more private?
Self esteem. Your confidence is an asset that needs to be protected. I’m not referring to vanity, arrogance, or exaggerated self-importance. I am referring to the need to have a positive feeling about yourself and what you do. In any business ­ especially a subjective and creative field like audio ­ your self-esteem is always at risk. Some people are “thick skinned” or more resilient than others.

Some people are very comfortable taking risks. Others are “risk averse”; that is, they consciously avoid risk and are willing to accept lower returns (like less money or notoriety) as a result. Where do you fall on the risk spectrum? Let’s do a brief exercise to start thinking about the topic more concretely.

In the table below, simply check the boxes in each category that make the most sense to you. Remember that there are no right or wrong answers, and that only you will see them, unless you choose to share the information with anyone else. Also keep in mind that you can change your mind over time as conditions change. Here we go.

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What’s your risk quotient? If all of your check marks are in the first column, you are risk averse. That’s OK, but indicates that you should look for work on someone else’s payroll. If your check marks are spread across the three columns, you have more options, including going into business for yourself.


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