Entrepreneurship and Risk: the Five Forces of Entrepreneurial Risk: Forces That Cause Business Failure and Discontinuance

The major complications with the pursuit of business ownership are the significant risks involved. As a result, there are a significant number of small business failures. Notably, a remarkably large percentage of people who begin the start-up process terminate it less than one year later. Of those that survive, many are unable to achieve sustained growth and profits. Small-to-medium business enterprises (SME) have a 50% chance of surviving five year or more. There are many variables of risk that influence the survival of a business enterprise. There are five critical forces of entrepreneurial risk: (a) personal characteristics, (b) intangible operations, (c) enterprise operations, (d) market climate, and (e) business environment. Building on key theoretical concepts grounded in economics literature such as endogenous and exogenous risks, this research focuses on examining the five forces of entrepreneurial risk associated with small business failure.