Risks Faced by Entrepreneurs at Global Level
Entrepreneurs are likely to be faced with financial risks. The entrepreneur will need funds in the form of a loan or saving in launching the business. For any new business, a financial plan should be in place to show the projections of income and the amount that will be needed in breaking even and the returns expected. Inaccurate planning of finances can lead to the bankruptcy of the entrepreneur.
Technology risks can also face the entrepreneur. Due to the constant emerging of new technologies, therefore for an entrepreneur to be competitive, a new system and process should be invested. Some technological changes are disruptive technologies that can easily result in paradigm shifts.
Basing of the local economics in estimating the market potential is another risk. The entrepreneur may overestimate based on the domestic context. There is less information on foreign markets; therefore, the entrepreneur must highly explore and do a cautious validation.
The fluctuations in currency exchange. The wings in currency exchange may lead to the wiping out of the entrepreneur’s gains. The entrepreneur must evaluate all options to hedge the risk.
Cultural sensitivities. The expectations of customers, business roles, and procedures are dictated by cultural traditions. The entrepreneur should make sure that they engage people in local markets in managing the business.
Political climate and processes of operation. The entrepreneur should proactively research to avoid fines and tarnishing of reputations.