Entrepreneurship Risks and Rewards

These flashcards cover the key concepts of risks and rewards associated with entrepreneurship as outlined in the lecture notes.

What are the main risks entrepreneurs face when starting a business?

Risks include business failure, financial loss, and lack of security.

How can risks be minimized in entrepreneurship?

Through market research that identifies a market and by analyzing cash flow and revenue forecasting.

What can cause cash flow problems for a business?

Unexpected drops in sales, recession, or increased competition cutting prices.

What is a potential financial consequence of a poor reputation for an entrepreneur?

It can affect their ability to raise money in the future.

What is a technical risk in entrepreneurship?

A situation where the product does not perform as intended.

What does lack of security mean for entrepreneurs?

They do not have the security of a regular wage, sick pay, or pension from an employer.

How does using personal savings to start a business affect an entrepreneur?

It leads to financial insecurity as they may run out of money.

What is intuition in the context of entrepreneurship?

Decision-making based on gut feelings or hunches rather than analysis or facts.

What constitutes rewards for entrepreneurs?

Business success, independence, making decisions, providing jobs, and potential profits.

Why is the potential for profit considered a major reward for entrepreneurs?

Because greater investment leads to greater rewards when profits are made.