The business environment is dynamic. Despite all the planning and risk management, some unforeseen situations expose businesses to several risks. A businessman doesn’t follow a unique or original path. An entrepreneur, who creates their own path, comes up with an invention to introduce an entirely new product, or they bring innovation to existing ones. There are a number of risks involved in entrepreneurship. One of the most common risks that entrepreneurs take is leaving a stable job to pursue their dream of carrying out a successful business. Therefore, compared to businessmen, entrepreneurs are exposed to different types of entrepreneurial risks. This is the reason why entrepreneurs in general are considered risk-takers.


  1. Examples Of Risk-Taking Entrepreneurs

  2. Types Of Entrepreneurial Risks

  3. Conclusion


Examples Of Risk-Taking Entrepreneurs

Jeff Bezos, founder of Amazon, left a high-paying job in the 1990s to initiate his entrepreneurial journey. Oprah Winfrey managed to overcome her personal struggles of having an impoverished childhood and became a pivotal figure in the multimedia industry.


Types Of Entrepreneurial Risks


There are various types of risks faced by entrepreneurs from the beginning of their entrepreneurial journey till their idea finally turns into a successful venture. The following are the different types of entrepreneurial risks:


  1. Financial Risk

     Every entrepreneurial venture requires funds to transform an idea into reality. Therefore, a critical risk faced by entrepreneurs is arranging funds. This may be in the form of loans, capital arranged with the help of family and friends or an entrepreneur’s own savings. Adequate financial planning should be done by an entrepreneur so that they don’t become bankrupt. Therefore, calculated risks should be taken.

  2. Strategic Risk

    This is another risk involved in entrepreneurship that deals with framing the right strategies. Each business requires a near flawless business plan. However, even a well-thought-out business plan can sometimes lead to failure. As a result, the strategy becomes ineffective. A company that manages to adapt to a changing environment and new challenges manages to sail through difficult times, whereas others fail.

  3. Technology Risk

    In the digital era, it’s imperative to constantly upgrade and accept new technologies. These disruptive technologies can change the entire game for entrepreneurs by easing out complex processes. On the contrary, those who are reluctant to change the conventional ways of working and don’t invest in new technologies can suffer a major entrepreneurial risk. Technology acceptance is the need of the hour, especially if an entrepreneur is working in a highly competitive industry.

  4. Market Risk

    Entrepreneurial risks can emerge from market-based factors as well. For instance, when the economy is growing and blooming, customers might get attracted to purchase luxurious goods. This leads to an increase in demand for luxury products. On the other hand, when there’s an economic depression, the demand for such products can significantly decline, leading to a severe risk faced by entrepreneurs. In such a scenario, tools such as market research, survey and analysis can help entrepreneurs undertake efficient entrepreneur risk management. 

  5. Compliance Risk

    When an entrepreneur plans to start their operations in a country, they have to be wary of the laws of the land. A company has to abide by existing laws and adapt to the changing legal environment in the future as well. This is one of the significant entrepreneurial risks that an entrepreneur may face. Any law framed in favor of or against an industry can change the trajectory of its success.

  6. Reputational Risk

    A major risk involved in entrepreneurship is related to a company’s reputation. If a company’s reputation gets damaged, a steep decline in revenue follows. The goodwill of the company declines among customers, which further tarnishes its image. Additionally, the company is unable to find talented employees who are reluctant to work in a place that has no reputation.

  7. Operational Risk

    This entrepreneurial risk arises when a company is unable to carry out routine business activities efficiently. As a result, overall productivity of an enterprise declines. This could be due to people failure or process failure as well. External events like natural disasters can also impact the operational efficiency of a company. 

  8. Competitive Risk

    To become a successful entrepreneur, it’s crucial to be aware of competitors. If there aren’t enough competitors in an industry, it may imply that the demand for the concerned product is not enough. Moreover, entrepreneurs should be able to make prompt moves to get an innovative idea or product patented before their competitors can take advantage of it.



Appropriate entrepreneur risk management is crucial to success. Each step taken should involve adequate research and planning so that an entrepreneur takes calculated risks. This would prevent them from failing. Harappa’s Leading Self course will enable budding entrepreneurs to anticipate and judge entrepreneurial risks better. It will increase an entrepreneur’s chance of success without risks. Check it out now!

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