Risk can be defined as possibility of failure or loss or other adverse consequences in pursuing some activity or venture. Risk bearing and entrepreneurship are inseparable from each other. Risk, as an attribute, affects entrepreneurial behavior. Among other things, the fact being element of risk involved in entrepreneurial career, deter many people pursue entrepreneurial career.

Even those who take risk by joining entrepreneurship differ in the degree of risk-taking ability and willingness. Depending on the degree of risk, risks can be categorized as high risk, moderate risk, and low risk. All three types of risks influence entrepreneurial behavior differently.

To start and support their own business, entrepreneur have to put their career, personal finances and even their mental health at stake. The following are few examples of risks that every entrepreneur must take, from ideation to ongoing development:

Abandoning the steady paycheck: Before venturing into the world of business ownership, many entrepreneur first have to say goodbye to your current job or career, i.e. bye bye to steady income.

Donating personal time (and health): Entrepreneur spend countless hours doing work to make their company successful, and remaining hours worrying about what they have or have not done thus far.

Betting on a crucial deadline: Startups are, by nature, forced into strict timelines for their product launches and milestone goals.

The rewards of entrepreneurship often outweigh these personal risks, but as an entrepreneur one need to be prepared to live this type of lifestyle. Risks shouldn’t steer entrepreneur away from pursuing entrepreneurship. Instead, entrepreneur see them for what they are: necessary obstacles on a greater path. There’s no way to avoid the risks you’ll face as an entrepreneur, but by recognizing them, one can prepare for and mitigate them.

Question to Consider:

1. Describe how risk taking is an important element of entrepreneurship.