Risk and Failures

Risk bearing ability

1. Entrepreneur takes a moderate risk. 2. Is careful and cautious while selecting his goals. 3. Challenges and risks are involved in identification of an opportunity and product selection. 4. Entrepreneur takes not only a risk but shoulders the responsibility of the outcome of the decision.

Factors of failure

Inexperience

Lack of technical or management skills. Experienced managers often make the mistake of assuming that since they are successful in salaried position, they can transfer the knowledge to an independent business. Cannot manage their resources or provide leadership for their employees.

Arrogance
Dont take advice from others

Mismanagement

Overinvestment Poor inventory control Poor financial control

Poor business philosophy

Entrepreneurs may not be committed to the long hours required to make a venture successful Disregard for customers

Lack of planning

Plans are guidelines for action and as business evolve, they must be continuously upgraded to reflect changes in the business environment.

Resolution for success

Reversing the factors of failures Understanding the purpose of being in business.