Question

According to the passage, why do European countries have a problem with entrepreneurs starting businessesA) There is too much investment capital. B) No one knows how to start a new business. C) The people are afraid of risk and failure. D) There is too much competition from established businesses.?

Answer 1

C

Step-by-step explanation:

Entrepreneurs face multiple risks such as bankruptcy, financial risk, competitive risks, environmental risks, reputational risks, and political and economic risks.

Entrepreneurs must plan wisely in terms of budgeting and show investors that they are considering risks by creating a realistic business plan.

Entrepreneurs should also consider technology changes as a risk factor.

Market demand is unpredictable as consumer trends can change rapidly, creating problems for entrepreneurs.

An entrepreneur will need funds to launch a business either in the form of loans from investors, their own savings, or funds from family. The founder will have to put their own "skin in the game." Any new business should have a financial plan within the overall business plan showing income projections, how much cash will be required to break even, and the expected return for investors in the first five-year timeframe. Failure to accurately plan could mean that the entrepreneur risks bankruptcy, and investors get nothing.