Risk and Reward in Entrepreneurship
Entrepreneurship is the method or acts for the starting of a business firm that is more likely to be a startup company that offers products of creativity and service processes. It is basically like a method of creativity. An entrepreneur discerns everything as his opportunity and shows bias in taking his options to make full use of the chance.
What is entrepreneurship?
It is necessary to make a profit in a business regardless of the uncertainties. Ergo, there is a need for a person of good leadership quality, and here arises the idea of entrepreneurship. It is the ability and boldness to develop, organize, and maintain a smooth flow in the run of a business. Entrepreneurship in the field of economics is related to land, labor, or any capital where profit has generated. The vision of an entrepreneur is defined as the risk-taking factor he takes to succeed in an ever-changing global marketplace.
Risks and Rewards of Entrepreneurship
The risk and rewards of entrepreneurship have explained below:
Risks of entrepreneurship:
In every field of interest, there is a factor that considering as a risk factor in entrepreneurship can be classified into two types
– the risks an entrepreneur has to face
– the risks an entrepreneur has to take
The risks an entrepreneur has to face
Most of the entrepreneurs are risk-takers by nature. When they decide to launch a business, they risk everything irrespective of the thought that they have no secure monthly income and where the time-space for family matters is relatively null. There are some factors of risk that an entrepreneur has to keep an eye on before starting a business. They are listed below.
Risks in the financial sector: The fund required to start a business might be either in the form of loans, lifetime savings, etc. The owner should put himself at risk during the start of this new venture. If you failed to return the investors for the next few years, it may lead to bankruptcy and might leave the investors empty-handed.
Risk due to vintage strategies: The strategies taken in a business plan should be appealing to the investors. Anyhow, we live in a fast-paced world, and as time goes by, the current strategies become outdated. To avoid this situation, we must update our strategies according to the change in the market, or else the company might struggle to reach its benchmarks.
Market risks: Many risk factors in the market can affect the sale of a product or service. The pros and cons of the sense of economy of the market pose a risk to new businesses. For example, if the economy slumps, people are inclined to buy non-luxury products rather than depending on the luxury ones. You must analyze the factors like the demand for a product or service and consumer behavior to capture the market.
Competitive Risk: The competitors are the major factor which an entrepreneur should consider. The lesser the competitor’s, the lesser the demand for the product in the market. A saturated level of large competitors might create a struggle to compete in the market.
The risks an entrepreneur has to take:
Risk-taking is a non-avoidable factor in entrepreneurship. To be a successful entrepreneur, you have to be confident to catch risks and face the challenges that follow. The following are the risks that the entrepreneur must take for ongoing development.
Abandoning the current source of income: Before you attain the ownership of any business, you have to resign from your current job or career. Some people always keep a backup plan to resume their old job or career in case things go wrong in their business. But a faction of the people holds the notion to risk their current career. There is no guarantee for your income in the first few months.
Sacrificing personal capital: Some entrepreneurs depend on external funding like loans, government grants, etc. You should at least take the risk of spending some personal money that means diminishing your safety net.
Trusting a key employee: There is only a minimal chance of attaining a full team at the start of a business. You will have only a few people who are willing to work for a lower salary for the upliftment of the company.
Rewards of entrepreneurship
In the fast-paced world of entrepreneurship, two kinds of people cohabit the world of business. Ambitions are not only limited but also have boundary lines. The ups and downs in the business are quite transient. The qualities and personal choices that an entrepreneur makes are important. A few of them follow.
Attributes: A person doesn’t need to be highly qualified to start a business. It is only imminent that he /she should possess the qualities to be a good entrepreneur. For instance, qualities of aggressiveness, social exposure, networking, and being good at mental mathematics are the most important hallmarks of intelligence. Moreover, marketing abilities should be possessed by them.
Attitudes: Two most essential qualities of being patient and perseverance are something that can be attained through entrepreneurship. He/She must attain the quality to compromise when things are down and to strive for betterment in the future.
Business ethics: The foundations of business will become weak over time if the business ethics and values are not in place. The reputation of a company is gained by acclaiming customer faith and public interests and introducing new business practices.
Human value system: The deciding platform or the root of any business organization is a strong HRM. The companies which are highly successful in consolidating human resources are traditional, while non-traditional companies invite more trouble in the name of innovation and rational approach.
The foremost importance of entrepreneurship is the creation of employment. It opens the door for an entry-level job that provides training for unskilled laborers. Entrepreneurship is the hub of innovations that provides new product ventures and quality products, which thereby increase the standard of living of people. The greater the employment rate the larger the society. It fluctuates lifestyle change and promotes higher expenditure in several fields of economy. As new products need to be researched and tested before the market launch, show its impact and support in the field of research and development.
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me either
hi coby hi uwu hi hi
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