Top 5 major Risk Factors of an Entrepreneur

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Business is a risky venture. Unless and until an entrepreneur takes risk, he or she cannot make profits. Win or lose is the name of the game. A businessman or woman can either make a success of his or her venture or suffer from many losses.

Risks have to be taken by businessman or woman. It is part of the game. If he is able to cross these bridges, then he or she gains monetarily. If not then he or she has to close down the venture and face problems in paying off debts.

Risks of Business in Entrepreneurship

  • Chances of suffering from heavy losses. A businessman or woman faces setbacks in business in case the market is not favorable or there is general economic decline. Recession, for example, causes much setbacks to business people. Products do not get sold in the market as the purchasing power of the individual comes down. Business people cannot sell their products and as a result are unable to make profits.
  • Market fluctuations – Market does not always remain stable. It fluctuates. Many variables cause this. Steady profits may not always be there.
  • Loan payments – A businessman is usually in debt as he or she has to borrow a lot of money to invest. Often he or she suffers losses and is unable to pay up the loans. Debts can cause much worry.
  • Strikes and Lockouts – Workers go on strike for either increased salaries or for being maltreated by management. Valuable production time is lost. An entrepreneur loses out on money on such occasions. Time is money for them.
  • Competition – Stiff competition at times can wipe out a business completely. Many times small ventures cannot survive the onslaught of big ventures. The latter have money to advertise and publicize their products.

A business without risks is not business at all. An entrepreneur loves taking risks. He or she gets much thrill in venturing into unknown domains.

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