Hi readers! I hope you are having a great day. Risks are a part of every entrepreneur’s life because starting and running a business without any personal experience requires a lot of potential. But entrepreneurs are risk takers therefore, they choose to present their own dream products instead of working for others in basic eight-hour jobs.
An engineer is always ready to take a risk in their life because, throughout their training and education, they learn to deal with risk and manage their time to get the best solution to their professional problems. Today, There will be a great discussion about the risks an entrepreneur faces at different levels of his success journey. The discussion will be not only for engineers but for all entrepreneurs, and this will lead you to solve the business issues because knowing the base of the problem means having half a solution to that problem. So let’s start with a basic introduction.
Introduction to Entrepreneurship
Entrepreneurship is the process of starting, creating, and launching a new business venture, and as a result, a new idea is presented to the market. It requires a great deal of risk-taking, hard work, and the identification of innovation in a simple product by making the ideas come to life. This can be done on simple, small, complex and large levels of business in any industry.
The person working on entrepreneurship is called an Entrepreneur. They come with the latest ideas and problem-solving behaviour to make their dreams come true. Entrepreneurship requires the identification of a gap or problem in society related to the business and then promoting the product or services as a solution to generate revenue.
An engineering entrepreneur has to face more problems during this process because of the competition in the market. It requires the practising of the tools and techniques in the engineering-related stuff where technical and engineering skills are required to solve the issues. These are the multi-taskers who have the ability to solve issues related to different fields at a time and handle responsibilities around the clock to push their business towards success.
Common Risks Faced by Every Entrepreneur
Entrepreneurship is done in almost all fields, but in every business, there are some common problems for which every entrepreneur must be ready. An entrepreneur is a risk-taker by nature; therefore, he chooses entrepreneurship over the guaranteed income of a job. He knows about his potential and has the ability to deal with the complex issues of daily business life. The reason for mentioning the risk factors here is to educate the new entrepreneurs to get ready and make sure they have the solution to all these problems. For the convenience of readers, this article is divided into different categories related to the risks an entrepreneur faces throughout his journey. Here are these:
- Entrepreneurial risks before starting a business
- Entrepreneurial risks at start-ups
- Entrepreneurial risks at the expert level
So let’s study them one after the other.
Entrepreneurial Risks Before Starting a Business
These are the issues for which the entrepreneur must be ready in all situations, no matter if he has experience or what level of education he has. Every entrepreneur in any field has to be ready for these risks:
Financial Risks
Starting a new business is not an easy task. It requires a lot of equipment and sometimes a team that requires a lot of money, according to the idea of business. No matter how small the business idea, it requires a minimum amount to provide the products or services.
In the case of a product launch, finance is required to design, buy raw materials, and produce the product. On the other hand, even if someone starts their services as an entrepreneurship idea, there must be a campaign to present their services, and it also requires investment.
All these are financial risks because no one can guarantee the success of the business. It means the investment in the business can easily be wasted if it does not grow.
Market Risks
The market is not the same all the time. There are great risks that the product an entrepreneur presents will have demand in the market, and the extent of this demand also matters a lot. There are many factors that determine this demand, such as economic ups and downs, competition, innovation of the idea, etc. Sometimes, the entrepreneur comes up with the most innovative and genuine idea, but the market is not ready to accept it. As a result, this idea is wasted, and all the investment can be ruined.
There must be a great study of the market while planning the entrepreneurship idea. The present, past, and future trends in the market will help to understand the nature of the market. Moreover, there must be a study of other’s experiences and ideas for the best planning.
Legal Risks
All the businesses in entrepreneurship have to be legally approved. This is the point that early, inexperienced entrepreneurs ignore, but the authorization requires every detail of a business in the market. It is important to start the business by following all the laws and rules to avoid future issues.
Entrepreneurial Risks at Start-ups
Once the initial issues are handled successfully, the entrepreneurs have to be ready for the start-up risks. These are the ones that remain with the entrepreneur throughout the initial journey. Here are some of these:
Operational Risks
A start-up business lacks the same operational equipment and team as other businesses. Moreover, a lack of experience can lead to errors and challenges. Many entrepreneurs at this level lose their confidence, but this is not the end. The more technical and economical experts help a lot to deal with such issues.
Team Risk
Start-ups have a small team that usually does not have any strong experience because experienced people prefer to work in strong businesses. Moreover, the lack of a high budget for a business is another reason to work with less experienced people. Moreover, the bond of trust is not sufficient at the start.
Management Risks
Entrepreneurs must have the management skills to expand their business at a greater level. Managing the team, resources, plans, and buyers is not an easy task. Usually, the team is divided into different levels to manage all the stuff.
Entrepreneurial Risks at the Expert level
Once the business is established, the risks do not end there. The extent and types of the risks change, but an entrepreneur has to face the issues and risks throughout their business life. Here are some issues for which the entrepreneur must be ready.
Market Competition
Once the business is established, the competitors have their eye on the other entrepreneurs. Professional skills and studies are required to deal with the competition, and one must have the idea to compete with other people in the same business with decency.
Market Expansion Risks
The market has not remained the same for a long time. With the advancement of technologies, fresh entrepreneurs come up with ideas that may disturb the business of others. Moreover, the market expands at a rapid rate, which may lead to unexpected challenges and misjudging of market trends. One must be ready for all the conditions every time and have the potential to provide innovation.
Geopolitical Risks
Expert-level entrepreneurs expand their businesses to other countries around the globe. There is a high risk of the failure of the business, economic, climate, and political trends of that country. It requires a lot of study and a strong team with a lot of investment.
Hence, we have seen the common risk factors that every entrepreneur faces, no matter to which field he belongs. The engineering entrepreneurial ideas are more innovative, and this is a positive as well as a negative point of the engineering field. One must be ready for all of these risks, and the list does not end here.
Entrepreneurship is always better as compared to jobs, but one must have the skills, courage, and investment to work for their dreams. A strong team is required for proper functioning and consistency is the most important part for the entrepreneur. I hope it was helpful to you and now you are ready to face the challenges and bear the risks as an entrepreneur.
Author Name: Syed Zain Nasir
Author Bio: I am a Mechatronics and Control Engineer and a part-time hobbyist, who believes that only research & technology can make this world a better place.