Scribd
Upload
35 views1 page

Entrepreneurship Risk

Uploaded by

Mr. Fox
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
35 views1 page

Entrepreneurship Risk

Uploaded by

Mr. Fox
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 1

THE ENTREPRENEUR’S C O N F R O N T AT I O N WITH RISK

Entrepreneurs face a number of different types of risk. These can be grouped into four basic areas:

(1) financial risk, (2) career risk, (3) family and social risk and (4) psychic risk.25

FINANCIAL RISK

In most new ventures the individual puts a significant portion of their savings or other resources at

stake, which creates a serious financial risk. This money or these resources will, in all likelihood, be

lost if the venture fails. The entrepreneur may also be required to sign personally on company

obligations that far exceed their personal net worth. The entrepreneur is therefore exposed to

personal bankruptcy. Many people are unwilling to risk their savings, house, property and salary to

start a new business.

CAREER RISK

A question frequently raised by would-be entrepreneurs is whether they will be able to find a job or

go back to their old job should their venture fail. This career risk is a major concern to managers

who have a secure job with a high salary and a good benefits package.

FAMILY AND SOCIAL RISK

Starting a new venture uses much of the entrepreneur’s energy and time. Consequently, their other

commitments may suffer and there is increased family and social risk. Entrepreneurs who are

married, especially those with children, expose their families to the risks of an incomplete family

experience and the possibility of permanent emotional scars. In addition, old friends may vanish

slowly because of missed get-togethers.

PSYCHIC RISK

The psychic risk may be the greatest risk to the wellbeing of the entrepreneur. Money can be

replaced; a new house can be built; spouse, children and friends can usually adapt. But some

entrepreneurs who have suffered financial catastrophes have been unable to bounce back, at least not

immediately. The psychological impact has proven too severe for them.

You might also like