Negative aspect of entrepreneurship

Entrepreneurship has the following negative aspects.

1.       Risk to failure : The entrepreneur bears personal liability for losses. The failure rate for new ventures is very high. There is no guarantee of success. The reasons are:

·         Lack of knowledge and experience of technical and business know-how.

·         Lack of capital. Poor creditworthiness with financial institutions.

·         Poor marketing. Lack of customer-orientation. Poor knowledge of marketing tools, concepts and competition.

·         Out-dated technology

·         Raw material shortages.

2.       Lack of professional management: New ventures lack professional management. This is reflected by:

·         Lack of vision and strategies.

·         Traditional management practices.

·         Centralized decision making. Lack of delegation.

·         Poor quality of employees. Staffing based on kith and kin relationships.

·         Ineffective leadership

·         Lack of use of systematic and analytical methods of management

3.     

             Changing government policies : Government policies change frequently. They adversely affect entrepreneurship. Policy also do not get properly implemented. Facilities provided to entrepreneurs in terms of infrastructure, training, advice and tax incentives tend to be inadequate.

4.       

      Low mobility: Mobility relates to movement of entrepreneurs between industries, occupations and locations. Women entrepreneurs generally suffer from low mobility. Family pressures restrict their mobility. Low mobility becomes a negative for entrepreneurship.

5.       Emotional stress: Entrepreneurship requires hard work, long hours and high level of energy. This may create emotional stress for entrepreneur.