Risks Entrepreneurs Take

Coming from a typical middle class background that focused on education and a white collar job, I used to think being an entrepreneur is a risky prospect. Now that I’m an entrepreneur, I have thought about the risks that are involved in becoming an entrepreneur. From my perspective, the following are the types of risks that one needs to take to leave full-time a job and pledge one’s future to an idea.

Financial risk: Most obvious. One goes from a regular income to no-income or uncertain prospects of an income. This can be mitigated to some extent by building up savings, relying on your partner to bring in the money and by maxing out your credit card. Other options include taking up part-time jobs to support while working on their venture. This has mixed results since working part-time takes the entrepreneur away from their venture. However, nothing would help the entrepreneur more than finding a part-time job that helps understand the industry and build useful contacts.

Career risk: Quite often, entrepreneurs strike out to start their venture within the industry. So they can bring their experience and contacts to help them develop their business. Even if the venture fails, the knowledge can be utilised in some way or other in getting back into the industry. In other situations, when they change their industry sector because they feel very passionate about something, getting back is always a risk and probably a bigger one.

Social risk: Depending on the cultural background of the entrepreneur, leaving a well paid job and leave to start one’s own venture could be hailed as a brave move or a foolish one. This also translates into the level of support that the entrepreneur gets from family and friends. The fear of failure and how it will be perceived by the society can be a major limiting factor for entrepreneurs to strike out on their own.

Brave are the ones who break their cultural stereotypes, overcome these risks and venture out to be the masters of their own destiny!