The risk of running out of finances is called financial risk. To run a business, an entrepreneur should have basic knowledge of the finances needed. Financial decisions are based on how well the owner manages the cash flow and the accuracy on predictions of income, sales and expenses. I chose this as a weakness because it reflects a previous family decision that didn’t go down well. A few years ago, my family started small café. However, a few bad financial decisions led to the closing down of the business in just two years and had drastic effects on the entire family.
Due to this, I possess a fear of financial risk. An entrepreneur raises capital for a venture by borrowing money from investors, personal savings or through family support. In my case, it was money from family members. Financial risk can be mitigated, if an entrepreneur does a comprehensive research such as having an in depth financial plan fused with the business plan displaying projected income, time needed to break-even and expected return for investors. One of the most important financial risks is that the entrepreneur could lose everything and face bankruptcy.
Moreover, feedback seeking is another weakness that I would like to mitigate. Entrepreneurs should manage feedback in a positive way using its value to identify issues and solve them. Feedback acts as a tool to gain insight from another perspective which in turn will help improve and grow a business. Feedback can be very motivating and encouraging also being an inexpensive and intense tool. However, indirect communication is mostly used to transfer negative feedback which may not always go down well. For instance, I sometimes take feedback as criticism to my hardwork. I also do not take sufficient feedback enough for me to reflect on my failure. During my time at college, I would be negative when I received negative feedback for my assignments and not look at it as an opportunity to work and build upon. In order to mitigate this weakness, I decided to seek professional help and was guided in looking at feedback as positive criticism rather than a backlash.
Lastly another weakness that I would like to work upon is my sense of distrust. A distrusting and overconfident entrepreneur will only bring more and more work upon himself/herself along with less input of knowledge from others. “So, if an entrepreneur is distrustful in others and overconfident, it will lead to excessive self-reliance and both the number and variance of errors is magnified”. (Gudmundsson and Lechner, 2013).
An example from my own experience is when a family friend asked me to invest money in some scheme that would yield higher interest for the money that I would invest in his investment company. In the beginning all went well as I got paid a substantial amount of interest for the money invested. After a while I was lured to invest more so that my profits from my investment would increase. In a few months my payments stopped and I realised that I had stopped receiving any money. I was told that the company had gone into debt. This led to a feeling of distrust as I was not informed and got duped off my money. Thus, it led to a sense of distrust in such investment companies. In order to mitigate this weakness so that I could focus on my entrepreneurial skills, I have decided to take professional help like seeking information from a registered financial adviser before making any financial investment.
Conclusion
In summary, this essay has assessed my entrepreneurial mind-set with reference to my strengths and weaknesses. Developing my attributes such as drive to achieve, calculated risk taking and entrepreneurial vision have given me confidence in trying to aim for more future focussed goals even in an uncertain venture. As an entrepreneur, I will work on getting my research done from well informed sources in order to achieve entrepreneurial success, making the best of every given opportunity. In order to mitigate my weaknesses I will take action like trying to resolve my challenges of tolerance for failure, financial risk and sense of distrust by collaborating well with my business associates and being transparent about plans and other things that may affect business. In conclusion, it is a reflection of my entrepreneurial journey in which I have tried to build on my skills, abilities and characteristics. Furthermore, I have also evaluated my weaknesses and found ways to mitigate them in order to be a successful entrepreneur someday.
