The Virgin Founder offers up some advice on knowing when the right time to put your money where your mouth is...
"To do, or not to do - that is the question. Business leaders get paid big bucks to make smart, informed decisions about whether or not to take the plunge on a potential venture, yet there is no science or advice anyone can offer that will help new entrepreneurs to make similar choices," reflects Richard Branson in a recent entrepreneur.com blog.
"Such decisions could never be programmed into a computer. It’s more like sitting on a jury: All reasonable doubt must be removed before you can pass a verdict one way or the other. (Thankfully, though, corporate decisions seldom involve matters of life and death!) That said, I have found that a few general rules often help me to arrive at a decision within the appropriate timeframe about whether to approve a project."
Here the Virgin Founder pinpoints three areas that every would-be investor should focus on before deciding to part with their cash...
Dealing with first impressions
For me, first impressions always matter a great deal, but I don’t let that thought process influence my decision-making when it comes to business matters. I’ve learned that even when an idea immediately strikes you as a really good one, you must push aside that first reaction and carefully and objectively weigh the potential new business’s pros and cons.
If no significant cons come to mind when you first evaluate an idea, that doesn’t mean that they don’t exist. Almost every start-up encounters unforeseen problems, so be sure to devote a lot of time to figuring out what they are and assessing solutions before you move forward - if you learn of a major problem after the launch, you’ll be in a much worse position to deal with it.
Don’t make decisions in isolation
Caution becomes doubly important if everyone on your team is unanimously in favor of going ahead with a project. No idea is perfect, so be on your guard and work hard at exposing the hidden problem areas. Find and address them, and you’ll only build a better business.
Avoid making a decision in isolation about whether to launch a venture: You must also consider how the project will affect the overall functioning of your company. Every choice you make as an entrepreneur will impact, to some degree, your ability to explore future opportunities - this is what the experts call the “decision stream.”
Is it ‘too good’ an offer to pass up?
You might feel that the venture you’re considering might be too good to pass up, but you have to keep in mind how it will affect your other projects down the road. If it appears that now is not be the best time to move forward, consider what risks, if any, there would be in putting the venture on hold for an agreed-upon length of time.
In those situations where you cannot take on a project because another is waiting in the wings, think about why one should get the nod and the other not, and what that says about your priorities.