Entrepreneurial Risk
Entrepreneurial Risk
Entrepreneurs’ life is not just about rewards, successes and achievements, its destructive source can be found within the energetic drive of successful entrepreneurs.Starting or buying a new business involves risk. The higher the rewards, the greater the risks. An entrepreneur journey is full of risk and reward. Risk shows the dark side of entrepreneurship, not all entrepreneurs are driven solely by monetary gain and the level of financial risk cannot be completely explained by profit opportunity. Entrepreneurial risk is a complex issue that requires far more than a simple economic risk versus — return explanation.
Entrepreneurs face four basic types of risk
Financial risk- Financial risk is the risk of a business running out of finances. Entrepreneurs need to have a good financial sense in order to run a business successfully. They need to manage cash flow, predict demand and supply so that financial decisions can be taken properly.
Career risk-Some entrepreneurs start company after company (aka “serial entrepreneurs”), others turn back to the job market. Unfortunately, your resume can look odd after a few years at startups, making it tough to fit neatly into any well-defined corporate roles. And if employers sense that you’d rather be starting your own businesses than holding a job, they might perceive you as a “flight risk”.
Family and social risk- The risk of walking away from security and career path to create something new. The risk of taking yourself and your family into an unfamiliar storm of stress and uncertainty. The risk that you’ve miscalculated an opportunity, or your own internal resources as you plunge into a new venture.
Psychic risk-It is greatest risk to the well being of an entrepreneur,money can be replaced a new house can be built,friends and family can adapt.But some entrepreneurs who have suffered financial catastrophes have not been able to bounce back specially immediately.The psychological impact has been considered as the most serious one.
