Common risk in entrepreneurship

We can now explain some of the common risk found in normal entrepreneurial life as given after the cut.

Risks from natural disaster, many natural occurrences happen that, usually have a great effect on the operations of business. Such occurrences include flood, rainstorms, fire, etc. These are very common in many of our cities and towns-many of which are centers of entrepreneurial activities. Example of this is flood that usually ravage parts of Lagos metropolis during the rainy season. When such incident happens, they tend to cripple enterprises thereby leading to looses. Unfortunately, many of these risks cannot be insured against because of the fact that the possibility of their occurrence cannot be estimated accurately as previously stated. However, as an entrepreneur, the solution to the problems of natural disasters is always embraced by preventive measures. For example, when building factories and offices, care must be taken to ensure that adequate drainage is provided. Also, the various environmental rules must be observed. All these and others may go a long way in preventing the devastating effects of natural disasters, if the dictum prevention is better than cure is to be upheld.

Another risk involve is the fluctuations of price and other economic changes this includes unexpected change of economic policies of government. It is a common thing in business, especially during an inflationary period, for prices to change unexpectedly. When that happens, the effect may be a loss of profit for the entrepreneur.

Besides, there are other factors in an economy that may tend to complicate risks involved in economic changes. For example government policy may change suddenly.

Next to it is organizational risks. These are risks arising from the various policies of an organization. They include loss of key managers either through labour turnover or through retirement, taking wrong decision at any level etc. The risk of loss of key managers is particularly relevant to small scale enterprises, where the fate and even the future organization is tied to the performance of one of the key managers e.g. in small organizations the Owner is usually taken as all-in-all. The same thing could happen in a large enterprise especially, where the organization is a centralized on a few mangers dictating the tune. Such losses could spell doom for the enterprise, it is therefore advisable that an organization should prevent this kind of situation by proper for instance, a career development and succession programme could minimize or eliminate such risks.

Another risk involved is technological changes. In modern times, technology changes, whenever they com tend to bring along with them, some risks such as obsolescence loss of market. Etc. for example, with the introduction of the electric typewriter, the manual typewriter has become obsolete, if a new one has been of production. When that happens, the enterprise can incur a great loss e.g. there may be no more market for the obsolete product. Hence, the need for the enterprise continuity need researches.

Risk arising from other environment factors apart from technological changes, risks may also come from other environmental factors, such as legal/political as well as socio cultural factors. Government, sometimes, does enact laws that affect the fortune of a business.