“Why are you doing this? Nobody ever does business this way. You are going to make a huge loss. Don’t do this there is high-risk involved.”
If you are an entrepreneur, you might have heard these comments… lots of times in your career. Ordinary people don’t envision the things as an entrepreneur does so they’re unable to think of the results and success that lie behind the risk. It is only the dead fish that go with the flow, so you don’t have to follow the norms or have a pre-set approach to business. If you are trying to bring a change and you have a revolutionary idea for a product or service, why follow the methods that everyone else is? There is no reason to do something only because everyone else is doing it.
For most, the prospect of making your own decisions and being in charge of your own destiny is worth it. But if you’re going to be successful as an entrepreneur, you have to be prepared for the risks and challenges that come with it.
The following are risks that every entrepreneur must take, from ideation to ongoing development:
Abandoning the steady paycheck.
Before you venture into the world of business ownership, you’ll first have to say goodbye to your current job, and in some cases, your career. Some people have the luxury of a backup plan, an option to resume your career in case things don’t go well in your independent business.
But for most starting entrepreneurs, the choice is a risky plunge. There’s no guarantee of your personal income, especially in the first few months and years of your company’s existence. You’ll probably be too busy to secure or sustain an alternative line of income.
Sacrificing personal capital.
Some entrepreneurs are able to start their ventures relying solely on external funding. That usually means a collection of investor contributions, grants and loans, and results from crowdfunding campaigns. But many entrepreneurs also have to dive into their own bank accounts and personal savings to get things started.
You may not need to completely liquidate your nest egg, but you will have to front at least some personal money, and that means abandoning, or at least diminishing, your safety net.
Trusting key employees.
When you first start a business, you won’t have a full team of employees working for you. Instead, you’ll probably have a small, tight-knit group of people working tirelessly together in an effort to get things up and running. You’ll have to put an overwhelming amount of trust in them, especially if they have special skills that are hard to find and are willing to start work at a lower salary than the industry standard.
For example, if you hire a single, experienced lead developer to work on your product, you’ll need to have absolute trust in their ability to get the job done on time. Otherwise, your timeline (and your product) could be fatally compromised.
Sacrificing personal time.
Entrepreneurship takes a toll on the average person. You’ll spend countless hours doing work to make your company successful, and your remaining hours worrying about what you have or have not done thus far. You will lose sleep, you will miss out on personal time, and you will experience much more stress than usual.
The rewards of entrepreneurship often outweigh risks, but you have to be prepared to live this type of lifestyle.
Risks shouldn’t steer you away from pursuing entrepreneurship. Instead, 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. By recognizing these risks, you can prepare for and mitigate them.
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