Notes- Drawbacks of Entrepreneurship

Drawbacks of Entrepreneurship

The drawbacks of entrepreneurship are most likely to in some way centre around the fact that the practice is so unpredictable. The whole principle of entrepreneurship is that the entrepreneur is taking a chance on exploiting untapped markets, or producing untried products and no matter how extensive their prior investigation may be, there can never be that guarantee of certain success.

When an entrepreneur develops a new business idea or tactic, they will in the first instance if they are sensible compile a detailed business plan. Part of the development of this business plan will be the conducting of a feasibility study in to the likely market for their product or service, the extent of that market and the frequency with which they are likely to obtain repeat business from their customers. The drawback of entrepreneurship in this sense is that even if there are orders placed for the early days of the business, there are no guarantees that the customers will return or with what frequency, or that new customers can be attracted to the business in the longer term.

Another drawback of entrepreneurship is that even where the entrepreneur has identified a very significant gap in the market for their product or service, they have no guarantees that someone is not going to come along and provide a better service or produce a better product at a more competitive price very soon after they begin trading. Even where products can be patented, ideas can not and any competitor only has to develop the product to a sufficient sense as to differentiate from the original in order to provide an alternative option for customers.

Entrepreneurship can very often involve the individual going out on a limb and essentially putting all their eggs in one basket. Where business takes a significant turn for the worse, such as it did for a great many in the Credit Crunch which manifested itself in 2008, for reasons totally out with their control, the entrepreneur can find themselves in significant difficulty with no other business options to fall back on.

The drawbacks of entrepreneurship can be that entrepreneurship is almost a sense of gambling. When the cards are dealt in a desirable fashion, the rewards can be very great. Where, however, even simple fate conspires against the entrepreneur, the nature of their business can mean that their very commercial existence is placed under significant threat.

In nutshell, following points are relevant in this context-

1.        Uncertainty of income

2.        Risk of losing your entire investment

3.        Long hours and hard work

4.        Uncertainty of income

5.        Risk of losing your entire investment

6.        Long hours and hard work

7.        Lower quality of life until the business gets established

8.        Uncertainty of income

9.        Risk of losing your entire investment

10.      Long hours and hard work

11.      Lower quality of life until the business gets established

12.      High levels of stress

13.      Full responsibility