Evaluating Your Capacity for Risk

How Much Risk Can You Tolerate?

A final element to consider before committing to a business idea is how much risk you can tolerate. After all, it could be several years before your business becomes profitable.

Consider this story. Bob and Anna Jones opened Jones’ Pub in 2015. For the first few years, Bob tended bar and Anna waited tables. Although their business barely broke even, they managed to survive on their tips. After all, it was just the two of them and their lifestyle was pretty frugal.

However, eight years later Bob and Anna decided to open a second location. By now, their first location was doing well enough to support themselves, their two young children, two new cars, and a home in a nice neighborhood. However, this also meant that they needed success from the second location faster: living off of tips is no longer an option. As a result, their business plan and sales targets for the second location looked much different than the first location.

There Are Options!

This doesn’t mean that you have to commit to living in a box for five years and give up your lifestyle in order to be an entrepreneur. It just means that you have to be realistic! Consider these scenarios:

  • In his spare time, Steve writes a blog about healthy living. When he gets laid off, he decides to focus on it full time and try to make money from it. After all, he has nothing to lose!
  • Amanda’s full-time position as a sales executive helps feed her family of four. She has decided to start her small business slowly, by offering consulting on nights and weekends.
  • Tina and Sam travel frequently and work shiftwork. They’ve decided to start a travel consulting service that they can both contribute to in their off hours. Their goal is for one, and then both, of them to quit their full-time jobs and make their small business their primary source of income.
  • David wants to buy a house in the next year. He enjoys photography, so he decides to do some freelance work to help with the down payment.


If you decide to start your entrepreneurial journey while working full-time, there are a few things to consider. The first is burnout. Juggling a full-time job, family responsibilities, a social life, and your personal needs can be difficult to begin with. Adding a new business on top of that can be quite overwhelming. Be clear about what you are taking on and what it will mean to your friends and family.

As well, make sure that your new business will not cause problems with your current employer. Non-compete contracts, professional regulations, union policies, and non-disclosure agreements can all affect what you do in your spare time. Check with a labor lawyer to be sure.