An entrepreneur should have the ability to take risks to survive in a competitive industry and to acquire high financial returns. If an entrepreneur is facing challenges from other firms, he may need to expand or advance his business by taking risky launching new products in new markets or buying new technological advancement. If a firm has aggressive and innovative strategies, these risky decisions will bring growth in their venture. Roberts &Mayer explained that the presence of uncertainty during the new venture process is an important barrier for success. In this essay, we are going to discuss about some of the risks posed by the entrepreneur in their journey of entrepreneurial success along with the way to control it and some perks of entrepreneurship also.
Basically, an entrepreneur commonly faces three types of risks: business risk, financial risk and personal risk. The risk is that other companies that have similar products will compete with them is foremost in their intimal stage of start-up . Another risk is price changes, often times the cost to produce or sell a product increases which means that you will have to raise your prices this is a risk and it can slow sales and profit. The next risk is style changes, many times companies need to update or modernize styles may or may not go over well. The next risk is new products can come along and replace your product this is a great risk to many companies. Another risk is changes in the economy, sometimes there are downturns and economies and that results in lower sales because fewer people have the extra cash to buy your product. Another risk is accidents like personal injuries or mechanical problems with different equipment, these can often be costly to an employer and slow production. Another risk is unreliable income, unlike a job where you clock in and work hours a week and you have a guaranteed pay for every hour you work an entrepreneur has no guarantee. The income is based on many different variables. Another risk is that you have to rely on others, you cannot solely rely on yourself to get the job done and make the profits you have to depend on others and their skills in order to be successful. Finally, another risk is that you may miss out on your personal life, often times entrepreneurs suffer personally because they have to devote so much of their time and energy to their business.
Controlling the Risks
The first way the entrepreneurs control risk is through risk avoidance, this is eliminating the risk by abandoning or refusing to take part in an activity. If it seems too costly another way to control risk is through risk assumption, accepting the fact that there is a risk of loss sometimes reducing certain risks. May be too expensive generally the small business owner will assume risks in which losses that occur will not produce significant financial consequences to the business. Another wayis using different methods to reduce the probability that a given event will even occur although. Some risks cannot be avoided a lot of risks can be reduced the primary control technique is prevention by the use of safety and protective techniques. Finally, we have risk transfer which means shifting the consequences of a risk to persons or organizations outside your business this is often done through insurance and this is something that people that are entrepreneurs do as well because we all purchase insurance.
The ability to have control over your finances and not rely on other people or banks for money wealth or possessions. we can set our own schedule this allows an entrepreneur the flexibility to make plans in a way that they want and to work at a variety of different hours. They can also bring your personal vision to life. Often people have an idea or a vision but they are not able to make that vision come to life because their energy is spent working to fulfill someone else’s vision in entrepreneurship your vision can become the reality. Many people have creative minds but they are not able to use them because they work for a company that already has a design and a plan for their product. Entrepreneurship allows for personal freedom and creativity to be expressed. There is no fear of being fired as an entrepreneur you do not have to worry that you will come to work one day and you will have no job, you have your job as long as you want it. They can work anywhere as an entrepreneur you can work at your office and at your home an airplane or a train anywhere. There is a sense of personal accomplishment this comes from seeing something you created come to life and be a success many people that work for another person or company that come in everyday they do a job that they don’t love, they don’t have that personal accomplishment in their life from the joy the work that they do. There’s limitless income unlike a job where the max pay maybe fifty or sixty thousand a year an entrepreneur has no top pay and the sky is the limit. There is better quality of life overall and a more meaningful life and finally you can make a large impact on others as an entrepreneur. You may be one of those people who wants to have a positive impact on the world as an entrepreneur you have the potential to help people who are struggling financially and help them to become independent and lift them out of poverty by offering them jobs or. If you have a lot of income you can donate money and help others that way too now.