Entrepreneurship Case Study

1523 Words7 Pages
Entrepreneurship according to Onuoha (2007), “is the practice of starting new organizations or revitalizing mature organizations, particularly new businesses generally in response to identified opportunities.” Schumpeter (1965) defined “entrepreneurs as individuals who exploit market opportunity through technical and or organizational innovation”. For Frank H. Knight (1921) and Peter Drucker (1970) “entrepreneurship is about taking risk”. Bolton and Thompson (2000) have defined an entrepreneur as “a person who habitually creates and innovates to build something of recognized value around perceived opportunities”.

Harwood et al., (1999), states that “…risk is uncertainty that matters and may involve the probability of losing money, possible
…show more content…
Entrepreneurs argue that the higher the risk, the higher the return on investment. As an entrepreneur it is advised that one weighs in on the size of the risk before making an investment. There are several types of risks faced by an entrepreneur and these are Competitive risk, Technological risk, political risk, economic risk, financial risk, human resource risk, strategic risk, environmental and health and safety risk. Competitive risk is the risk of a business facing competition from its rivals. Every new business faces the risk of competition because there are substitutes easily available in the market and existing players that are already offering a similar product in the same market. In order to reduce this risk an entrepreneur must run a proper SWOT analysis and come with strategies to counter attacks from competition. Technological risk is risk which may threaten assets and processes vital to the business and may prevent compliance with regulations, impact profitability and damage a company's reputation in the marketplace. Information technology (IT) risk can result from human error, malicious intent, or even compliance regulations. The technological world is changing everyday and the entrepreneur must always be abreast with what is going on in the technological world because what is good today may become obsolete tomorrow, hence it is difficult for…show more content…
Risk management techniques include risk reduction, risk transfer and risk avoidance. Entrepreneurs can reduce risk by selecting a business structure that limits personal liability. This can be done by changing from sole trader to corporation or limited company was the liability is limited. And entrepreneur may also transfer risk to insurance companies by insuring against risks such as damage to assets, product liability, injuries to customers or workers and also death or incapability of company principles. Transfer of activities with severe consequences but high benefits can be done to other parties like suppliers and
Open Document