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Business Risk

Business Risk 
Entrepreneurship 

You take risks when you invest because what happens in the stock and bond markets is unpredictable. And you take risks when you form your own business. The business environment is unpredictable too.

Businesses can fail for many reasons. Some of the common ones are:

  • a poor business plan
  • inadequate financing
  • poor financial controls
  • strong competition
  • management mistakes

For example, what problems can you imagine for someone who decides to open a video store this year?

One of the biggest risks you face when you work for yourself is financial. You risk not making enough money to pay yourself adequately for your time and energy. It’s no fun to work for nothing even if you love what you do.

Another risk is that you’re personally responsible for repaying the money you borrow to launch and run your business. Lenders often require that guarantee from small business owners.

You don’t want to ignore the potential for risk, or the evidence that more than half of all new businesses fail. But it doesn’t mean you won’t be among the ones that succeed.


 

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