Top 9 Risks Of Entrepreneurship

9 common entrepreneur risks that most entrepreneurs face in their business endeavor

Aliyan Shaikh
Mar 20 · 3 min read

Starting a business is not easy. From ideas to implementation, there are struggles that cloud our minds day in and day out. You are taking a risk. A huge risk. You are laying everything on the line so you can get yourself and your family out of the rat race, once and for all.

While we discussed how hard entrepreneurship really is, we have yet to speak of the risks that come with the title. Remember that entrepreneurship as we define it is not related to business, but rather someone’s ability to innovate and create value for others.

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Here are the top 9 risks of being an entrepreneur:

1. No Steady Pay Check

If you are an entrepreneur, this means that you will often have to give up the security of a steady salary at the end of the month. This means that if your business is not doing so well, it can have a serious effect on your personal income.

2. Sacrificing Personal Capital

A lot of times entrepreneurs have to use their own savings to get their business off the ground until they have developed it enough to be ready for external funding from angel investors, government grants, loans, or crowdfunding campaigns. If you are not planning to take investment or look for funding, the strain on your savings can be even larger.

3. Relying on Cash Flow

It can be a real challenge to secure enough cash flow in your business on an ongoing basis. This is particularly true if one of your bigger clients pays late or you lose a client, then costs can quickly exceed your revenues and you will need to tap into savings to pay the bills.

4. Interest in Your Product/Service

Even with a lot of research and tests, you only have an estimate of people’s interest in your product/service, and that interest is somewhat unpredictable. This means that your financial projections can be flawed, which can have major effects on your company.

5. Trusting Key Employees

If you are starting your business, you won’t have the resources to hire a full team, which means you will have a small group of people putting a lot of effort into the product to get it going. This means that you will have to put a lot of trust in this small group of people to get the job done otherwise, your timeline can be completely wrong.

6. Betting on a Crucial Deadline

Finances are often tight in a start-up and investors want to see progress, which means that several milestones can be tied to a certain deadline. This means that entrepreneurs regularly have to worry about hitting a specific deadline and need to make sure to have a follow-up plan if it does not work out.

7. Committing Personal Time (and Health)

You will spend countless hours working on your business to make it successful, which will make you miss out on personal time, and often entrepreneurs end up sacrificing their health by not sleeping enough, being under constant stress and eating unhealthy foods.

8. Emotional Risk

Starting a business will mean that you will go through an emotional rollercoaster — you may feel others had it easier to start with, there might be the jealousy of a competitor who got into the press, romantic difficulties because you are spending so much time on the business, self-doubt, problems with time management and not enough time to see your family and friends, feeling of rejection by investors, press, etc, or problems with your fellow co-founders or employees. It can also be a large burden to be responsible for the business all by yourself, which can be scary and lead to feelings of loneliness.

9. Risk of Scaling

As your business is growing, a new set of challenges will be awaiting you, spanning from hiring more employees, opening another office, technical upgrades, launching a new product to acquiring another business. There are a lot of pitfalls on the way so you need a strong support network and a team you can trust to help you with these challenges.

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Aliyan Shaikh

Written by

A 19 years old teen who loves writing all about business, entrepreneurship, investments, personal development, and life lessons.

Business Teaching

Start Your Business | Be Your Own Boss | Educate Yourself Financially

Aliyan Shaikh

Written by

A 19 years old teen who loves writing all about business, entrepreneurship, investments, personal development, and life lessons.

Business Teaching

Start Your Business | Be Your Own Boss | Educate Yourself Financially

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