Risk That Entrepreneurs Encounter

Any kind of business has a risk factor associated with it.
And every business owner is told to develop strategies
to reduce risk. There are always positives and negatives associated with taking risk. The following are some risks that entrepreneurs may face while establishing their start-up.

Market Risk

It is one of the most volatile components in the business. Therefore, every entrepreneur should be able to anticipate the changes in the market and in turn, develop and implement
strategies that would attract targeted customers.

Credibility Risk

In today’s market, brands play a dominant role in consumer’s decision-making process. The credibility of the brand name would help an entrepreneur to establish strong grounds for their business. For example, if The Body Shop launches a new product, their customers would buy the product due to the trust and knowledge associated with the brand.

Technology Risk

New technologies, especially those characterized as “paradigm shifts” or “disruptive” may have long and costly acceptance cycles, or may run into unpredictable performance or manufacturing problems.

Investor Risk

Capital is one of the basic requirements for any start-ups. Liquidity and a vast pool of resources can determine the success of the business. Entrepreneurs should be careful while selecting the investors for the business that would provide strong financial backing and maintain liquidity.

Competitive Risk

Entrepreneurs need to analyze the competition in the market. Knowing who the competition is and analyzing their strengths and weaknesses would provide a competitive advantage in the marketplace. Even in an open space, entrepreneurs need intellectual property, like patents, to keep potential competitors from overrunning the business.

To read more, visit: http://www.youngentrepreneur.com

What risks have you encountered as an entrepreneur? What advice would you have for start-ups when facing risk?

Thanks for reading, and until next time… stay WISE!


  1. dongrgic October 17, 2012 Reply

    Every entrepreneur should have a risk management plan in place for their venture.

    • wisesyracuse October 17, 2012 Reply

      Great idea! It’s important to plan ahead for risk and be ready for any outcome.

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