1. Drawbacks & Problems of
Entrepreneurship

2. Problems of Entrepreneurship
• Risk of Losing Invested Capital
• Starting a business is all about risk. And the small
business failure rate is relatively high. According
to a study by the National Federation of
Independent Businesses (NFIB), 35% of
businesses fail within two years, 54% fail within
four years and 64% of new businesses fail after
six years. When a business fails it can be
financially and emotionally devastating. People
contemplating entrepreneurship should decide
how much they are willing to risk.

3. Problems of Entrepreneurship
• Long Hours and Hard Work
• The average small business owner works 52
hours per week. In many start-up business, 10
- 12 hour work days on 6 - 7 days of the week
with no paid vacations is the norm. Because
owners must often do everything
themselves, they experience
long, intense, draining work days.

4. Problems of Entrepreneurship
• Lower Quality of Life Until the Business is
Established
• Long hours and hard work can effect the
entrepreneur's outside life. Business owners
often put their role as company founder ahead of
their role as husband, wife, or parent. Marriages
and friendships are some unfortunate casualties
of entrepreneurship. Part of the problem is that
most people launch new businesses between the
ages of 25 and 34, just when they start their
families.

5. Problems of Entrepreneurship
• High Levels of Stress
• Most entrepreneurs make significant
investments in their companies; they leave
behind a steady paycheck, and mortgage
everything to get into business. Failure can
mean total financial failure as well as a
psychological blow. This creates high levels of
stress and anxiety.

6. Problems of Entrepreneurship
• Complete Responsibility
• Entrepreneurship is highly rewarding, but many
entrepreneurs find that they must make decisions
on issues they are not very knowledgeable about.
When there is no one to ask for answers, the
pressure can build quickly. The knowledge that
these decisions could decide the success or
failure of a business can have a devastating effect
on the business owner.

7. Problems of Entrepreneurship
• Discouragement
• Launching a business requires much
dedication, tenacity and discipline. Entrepreneurs
may run into many obstacles, some may even
appear to be insurmountable. Disillusionment
and discouragement can set in, but successful
entrepreneurs know that every new business
encounters rough patches and that perseverance
is required to get through them.