Lecture One

Background to Understanding Entrepreneurship

1.1 The Nature of Enterprises
The terms entrepreneurship and entrepreneur came out of the word enterprise. It is therefore
important to understand the meaning of enterprise in order to appreciate all the other
concepts.
Enterprise
The term enterprise can therefore be defined as a properly planned and organized project,
undertaking, or a business unit that is associated with risk and reward, and the personal
attributes required to start and operate such an entity successfully. The personal skills and
abilities required to start an enterprise is usually qualified as entrepreneurial traits/qualities or
what some authors referred to an entrepreneurial mindset.
1.1.2 Classifications of Enterprises
Enterprises comprise all types of projects or undertakings. Enterprises are usually classified
based on a number of factors such as the nature of objectives being pursued, size of the
enterprise, ownership structure, and the products of the enterprise. Although these factors are
interrelated, they serve as the basic distinguishing features of the various enterprises in any
society.
The basic objective of an enterprise is either for the achievement of profit or not-for-profit.
Therefore, an enterprise can be classified based on its basic objective, whether profit or not-for-
profit
Some Objectives of Business Enterpríses
1. Profit Maximization: Business are basically established for profit.Profit is the excess of
sales revenue over costs and expenses.Therefore, in order to make profits, managers must
ensure that sales are increasing and costs and expenses are kept down.
2. Growth: Managers equally pursue growth and expansion of their businesses. Growth
objectives are achieved through different strategies that involve more and better products,
geographical expansion through new branches anc businesses etc.
3. Customer Satisfaction: Customers are the reasons for the existence of businesses. It is
important to ensure that customers are attracted and retained to keep the sales going.
Business organisations usually attract and retain customers through many strategies such

1
 as quality products, moderate prices, services, education, timely delivery, and good
packaging
4. Employees' Satisfaction: Employees need adequate and equitable pay,good work
environment and tools, recognition, etc. to work well and be committed.
5. Cost minimization: Entrepreneurs and their managers also pursue cost minimization to
get a good bottom line. Costs are reduced through excellent negotiation skills, efficient
sourcing, skilled workforce,productivity, good machines etc.
6. Good Public Image: Every business organization needs to build and maintain good
corporate image through good behavior of its managers and employees and by being
responsive to social responsibilities. Social responsibility actions are expressed to all
stakeholders of the business and this cost money too.
7. Market and Competitive position: All businesses always aim at increasing sales to bring
in the money. Achievement of market position such as leadership, follower, challenger,
or nicher requires some managerial and financial commitment.
8. Survival: In times of unfriendly wind from the external environment, business
organisations seek for strategies for survival. The basic goal of any business in times of
environment turbulence and uncertainty is concerned with how to survive in the face of
challenges such as economic recession.

Size of the Enterprise

Enterprises can also be categorized into micro, small, medium and large-scale enterprises.
Micro, small, and most medium enterprises are mostly managed by their owners because the
scope of activities is not usually relatively large, and start-up capital is also not too
cumbersome. Large enterprises such as refineries, deposit money banks, textiles companies are
not as common as small enterprises but they are involved in large scale activities and because
of this they require large capital to set up. These profit-oriented enterprises are usually
structured as large private limited liability companies or public limited liability companies (or
variously referred to as corporations). There are also many large-scale not-for-profit enterprises
in our societies in the form of educational institutions such as universities, polytechnics, and
other institutes; churches, NGOs etc.

2
1.3 Entrepreneurship
Entrepreneurship is an important part of modern economic, social and political life of any people
or nations. It is also a process, entrepreneurship involves recognition of opportunities, evaluation
of such opportunities for careful selection, marshalling resources to tap on the opportunity for
reward while bearing the risks.
Entrepreneurship is the manifest abilities, skills and behavour of an individual or group of
people to birth business ideas, recognize business opportunities, gather resources to maximize
selected opportunities, bear risks, cope with uncertainties, and manage resources to achieve
success or reward in the face of various environmental challenges. Entrepreneurship is a way
of thinking, reasoning and acting that is opportunity-based, holistic in approach, leadership
balanced, innovative, and growth-oriented. The pursuit of opportunities usually results in the
creation of value; something new such as a product or an organization.

1.3.1 Characteristics of Entrepreneurship

Entrepreneurship is known through some characteristics that distinguish it from other
endeavors of life.
Creative Activity Entrepreneurship entails creativity and innovation. It either a new
organisation is started, a new product is borne, or a new production technique is developed.
DynamicProcess Entreprencurship as a process is totally dynamic because it is not a static or
once-and-for-all activity.
Purposeful Activity Entrepreneurship tasks are associated with different types of risks and high
capital outlay.
Involvement of Risks The various risks that are associated with entrepreneurship include
financial, social and psychological for the entrepreneur.

1.4 Types of Entrepreneurship

The common types of entrepreneurship are social, indigenous, community-based,and family
business.
1.4.1 Social Entrepreneurship
A social entrepreneur is any individual who targets an unfortunate but stable equilibrium that
causes the neglect, marginalization, or suffering of a segment of humanity; who brings to bear

3
 on this situation his or her inspiration, direct action, creativity, courage, and fortitude; and who
aims at and ultimately affects the establishment of a new stable equilibrium that secures
permanent benefit for the targeted group and society at large. This definition of social
entrepreneurship encompasses for-profit and not-for-profit organizations created by these
entrepreneurs and also some government initiatives, but it excludes organisations that exist
solely to provide social services and those groups formed to engage in social activism.
Social entrepreneurs use their skills not only to create profitable business ventures but also, to
achieve social and environmental goals for the common good of all. They are people who start
businesses so that they can create innovative solutions to society's most vexing problems.
Therefore, they see themselves as change agents for society.

1.4.2 Indigenous Entrepreneurship

Indigenous entrepreneurship simply means entrepreneurship carried out by indigenous people,
but it can also refer to the common situation where indigenous entrepreneurs, sometimes
through community-based enterprises, start businesses that are largely intended to preserve and
promote their culture and values. There is rich heterogeneity among indigenous peoples, and
some of their cultural values are often incompatible with the basic assumptions of mainstream
theories.
Indigenous entrepreneurship often has non-economic variables. Some indigenous communities'
economies display elements of egalitarianism, sharing, and communal activity. Indigenous
entrepreneurship is usually environmentally sustainable; this often allows indigenous people to
rely on immediately available resources and, consequently,work in indigenous communities is
often irregular. Social organization among indigenous peoples is often based on kinship ties, not
necessarily created in response to market needs.

1.4.3 Community-Based Enterprises and Community-Based Entrepreneurship Community-

based enterprises (CBEs), usually emerge from a process in which the community acts
entrepreneurially to create and operate a new enterprise embedded in its existing social structure.
CBEs emerge when a community works collaboratively to create or identify a market
opportunity and organize themselves in order to respond to it. These ventures are managed and
governed to pursue the economic and social goals of a community in a manner that is meant to

4
yield sustainable individual and group benefits over the short and long term. CCBEs are
positioned in a sector of the economy that is n1ot dominated by a profit motive, often because
there is little profit to be made, or by the govemment.

1.4.4 Family Business

A family business is a commercial organization in which decision-making is influenced by
multiple generations of a family (related by blood or marriage) who are closely identified with
the firm through leadership or ownership. Owner-manager entrepreneurial businesses are not
considered to be family businesses because they lack the multigenerational dimension and
family influence that create the unique dynamics and relationships of family businesses. Family
business is the oldest and most common model of economic organization. The vast majority of
businesses throughout the world; from corner shops to multinational publicly listed
organizations with hundreds of thousands of employees; can be considered family businesses.
The definitions of what constitute a family business vary amongst authors. Some include any
business that employs more than one family member, a very common situation that occurs in
three-quarters of all businesses. Other definitions are more restrictive and include only those
businesses passed on to a second generation wwhich happens less frequently or in about one in
three of family businesses. The common thinking is that family businesses are businesses that
are started, owned, and operated by parents,with children helping out and later taking over.
Today, according to Megginson, Byrd,and Megginson (2003), two contrary trends are
developing. First, many young people are going into business for themselves while tapping their
parents for funds to finance such ventures. In return, the children often give one or both parents
an executive position in the company including a seat on the company's board. The second trend
is the large number of spouses doing business together and this trend is expected to continue
into the twenty-first century. This second trend is the kind of family business we traditionally
think of: a marricd couple running a small neighborhood store, toiling long hours

1.5 Entrepreneur
Entrepreneur is the individual (or group of individuals) who acts as principal mediator of the
process of change through a specific project based on an opportunity that requires the
implementation of a new idea (ideas). An entrepreneur is a person who sees an opportunity and

5
assumes risk of developing a product in an existing organization or by starting a new
organisation to take advantage of the opportunity. An entrepreneur is any person or a group of
individuals that have the ability to recognize a business opportunity, gather the necessary
resources to exploit the opportunity while bearing the risks associated with these activitics and
enjoying the reward in the form of profits or other benefits. The risks that go with establishing an
organisation can be financial, social, and psychological.
Multitude definitions of entrepreneur have evolved over the years,but most if not all of them
according to Vander Werf and Brush (1989) include all or some of the following behavoural
components:
i. Creation. A new business is started mostly from the scratch or a new product idea is
born; bringing into existence something that wvas not there before.
ii. Innovation. The business involves development of a new product, process, market,
material, or conquering obstacles that would have stopped other people and turning
problem to opportunities.
iii. Risk assumption. The owner/entrepreneur of the business bears the risk of potential loss
or failure of the business.
iv. General management. The owner of the business guides the business and allocates the
business's resources.
v. Performance intention. High levels of growth and/or profit are expected.

1.6 Differences between an Entrepreneur and Small Business owners

Entrepreneurship has been misunderstood by many; it is therefore necessary to explain what
entrepreneurship is not. Entrepreneurship is not only linked to small business management.
Entrepreneurs are found in large as well as small-scale organisations. This means small
business does not have a monopoly of entrepreneurial talent. Most small business owners do
not innovate or pursue change in a continuous and purposeful way. Entrepreneurship is not the
unique domain of any country, gender, race, age, or socioeconomic sector. It can be found in
some form in every country, in every age group, and among both the rich and the poor. In
addition, entrepreneurship passion is not transferrable. Most people think of the entrepreneur as
a small business owner or put it in another way, that all small business owners are
entrepreneurs. This is far from the truth; the two concepts are different but they are closely

6
related. It is important to distinguish between entrepreneurial ventures and small businesses.
All entrepreneurs start and manage different enterprises but not all small business owners are
entrepreneurs. Although, it is difficult to distinguish between entrepreneurs and ordinary small
business owners, the differences would be clarified on the bases of the nature and scope of the
enterprises the two usually venture into, motivations for starting, objectives being pursued,
behavioral posture, decision making, management practices, and degree of commitment.

1.6.1 Nature and Scope of Enterprise; The entrepreneur starts and manages any of these types
of enterprises: profit-oriented, not-for-profit, small, medium, or large enterprises. They can
exist in large as well as small economic units, and in the private as well as the public sector.
This means an entrepreneur can be working as new venture creator in big companies or
organizations, or be independent; establish a new organization. A small business owner starts
and manages a small business for the basic purpose of sustenance and may be profit.

1.6.2 Motivations for Starting the Enterprise: Entrepreneurs don't just businesses.
Entrepreneurs start their organizations based on opportunity recognition and exploitation.
What differentiates entrepreneurial opportunities from other profit-making opportunities,
according to Glosten and Muller (1993), is that to exploit entrepreneur opportunities, one
must discover a new means to an end, with unknown outcomes and with resources not yet
under the control of the entrepreneur. The motivations that propel the entrepreneur are
opportunities to develop new goods and services, means to gather the required resources to
produce those goods and services, and mechanisms to bring to market at a price greater than
their cost of production. Most small business owners start their businesses based on
superficial and ridiculous reasons which cannot stand the test of time. Many of such
businesses usually cease after only a few years' trading, as the “heroic” vision fades making
the highly acclaimed growth in numbers of small businesses fake. The growth in the overall
number of small businesses has only been achieved through a high level of new entrants, and
some of these people quickly return to other types of employment, or sadly unemployment.

1.6.3 Goals and Objectives Being Pursued: The principal goals for starting any
entrepreneurial venture are high profitability and growth. The entrepreneurs and their

7
financial supporters are usually seeking rapid growth, immediate but high profit, and a quick
sellout that can possibly offer large capital gains. A small business owner usually establishes
the business for the basic purpose of furthering personal goals. Such personal goals may
include making a normal, moderate sales and profit, providing services to humanity,
expressing natural talents, gaining pride of ownership, or even running the business for fun.

1.6.4 Behavoural Posture: The behavior of entrepreneurs, especially those that started small
businesses can also be distinguished from other small business owners. Entrepreneurs have
their unique way of thinking, reasoning, and acting. This way involves bringing something
new to the marketplace and bearing the risk associated with creation of new value for
existing and new markets. Entrepreneurs start their business based on innovation and they
keep these businesses alive through innovation; they keep innovating new products or
services, new marketing strategies, and new ways to deliver products and services to
customers. By contrast, most small lifestyle businesses do not innovate or seek out change
in a continuous or purposeful way. Once they are established, small business lack
innovation. Owner-managers are usually close or even too close to the day-to-day problems
of their businesses as they grow to see opportunities or the need to change. Such pressure
and managerial blindness make small business management to easily become a reactive
process in which new ideas are pushed aside as a result of the need to cope with more
pressing realities thereby making the owner-manager an adaptor or a reactor to rather than a
director or creator of changes. Small businesses or owner-managers lack creative spirit
which is the reason most of them stick to the same industry. Risk-taking is a way of life for
the entreprencur. Entreprencurs are mostly known as risk-takers who instinctively know that
gains do not accrue to those who always play safety first. Although, the levels of risk that
entreprencurs can bear vary from one entrepreneur to another, the conservative owner-
managers only take risk to establish their businesses and will not be ready to take further
risk but to preserve what they have achieved. These small business managers mostly avoid
risk and engage in tight management practices for those risks that cannot be avoided.

1.6.5 Management Practices; An entrepreneurial venture is mostly characterized by

strategic and aggressive management practices. The entrepreneur seeks rapid growth and

8
high profit from his/her venture based on clear vision being pursued which makes the
adoption of strategic approach to managing the business imperative. The entrepreneur
understands the environment of his/her business; therefore,he/she cleverly chooses
appropriate strategies for entering and competing in the chosen markets. Good strategic
thinking which provides better guidance and creates proactive management of strategies put
the entrepreneurs far ahead of small business owners that prefer a more relaxed and less
aggressive approach to managing their businesses. Small business owners, because their
basic goal is usually the achievement of a certain degree of freedom, usually run their
businesses in a normal way with the expectation of normal profit and possibly growth.

1.6.6 Degree of Commitment of Resources; The entrepreneurs' higher commitment to the

success of their enterprises is borne out of entrepreneurial characteristics especially the
'basic' need for achievement personality. They are confident of success and have energy in
pursuing goals, they don't give up easily or they are not generally daunted by failure but
prefer to keep trying until they succeed. Entrepreneurs have the orientation of being
committed to taking action on potential opportunities. They pursue opportunities rapidly so
that the benefits from such opportunities can be maximized. Entrepreneurs have the 'push-
the-plug' and 'pull-the-plug' tactics for tackling opportunities. They withdraw their resources
rapidly from any opportunity that is considered wrong along the way to minimize losses
from the initial pursuit. In addition, entrepreneurs commit resources to a venture in a
multistep manner in an incremental pattern so that exposure to risk can be reduced at each
step and to provide the business with the flexibility to change direction rapidly when the
opportunity turns bad. Small business owners due to fear of losing control and possibly their
resources which may be due to inability to manage larger firmsdo not always respond to new
opportunities especially those that will lead to rapid growth and the commitment of large
resources.
An enterprise that started as a small business may become an entrepreneurial venture. The
owner's intention may change from 'no growth', or slow and steady growth to 'rapid growth'
and from normal sales and profits to high profits due to recognition of attractive opportunities
based on the appearance of a very good opportunity. This opportunity and the awakening of

9
the entrepreneurial spirit in the small business owner can turn the business to an
entrepreneurial business.

1.7 Self-Employment and Salaried Employment

Employment of a person's physical ability in the form energy and mental ability such as
expertise can be in the service of others or for personal benefits. Working for others is
commonly called regular paid or salaried employment while working in a personal business is
self-employment. Self-employment is a situation in which an individual conceives, creates,
manages and assumes responsibility for an enterprise mostly business enterprise rather than
working for others in a paid employment. According to Citizen Information (2014), a person is
self-employed when he/she owns a business rather than working for an employer. Abdul
Karim (2012) also describes self-employment as an act of working for oneself. Self-
employment avail the opportunity of generating one's income directly from customers, clients
or other organizations as opposed to earning salary as an employee.

1.7.1 Preference for Salaried Employment

Most people are working for others and if you ask them whether they want to start a business
full-time or part-time the answer you get is capital no. Many reasons have been forwarded to
support this position. These reasons for preferring salaried employment to self-employment
include some of these benefits and conditions or situations.
Pride in Employment: Working fora large, vell-known firm can be a source of pride to the
employee. Strong and big firms, especially multinational and transnational companies such as oil
companics and United Nation Organizations, can afford to pay good salaries and provide
excellent benefits to employees. Such benefits include opportunity to satisfy social needs such as
traveling from one country to another.
Job Security: The high mortality rate of small businesses has been argued by many to mean job
insecurity for owners. The job security of a business owner depends on the destiny of his
business, since the lives of most small businesses in developing nations are fragile, it means
except a small business is well-managed, it can fail. As a result of this most people prefer to
work in bigger organizations especially in civil service where their jobs are relatively safe
instead of establishing their own businesses.

10
Stable Temperament: There is a strong correlation between a man's health and the state of his
temperament, that it, his emotional system. The prosperity of most businesses fluctuates. At
times high profit is made, some other times moderate profit is made, and at other times heavy
losses are incurred. Small businesses are not spared these fluctuations because all businesses are
affected by factors in both the industry and general environment
A business owner is happy when much profit is made by his or her business. The reverse is the
case when a heavy loss is made. In such a situation his temperament is adversely affected. He
may be angry at everybody especially his employees and members of immediate family. If such
condition is not properly managed it can lead to severe sicknesses such as stroke or paralysis,
hypertension or even mental disorder in terrible situation of heavy and suddena loss arising
from natural disaster such as fire or flood.Most people that are not emotionally strong would
prefer to remain in regular employment to avoid such troubles that can affect their emotions.
Challenging Executive Cadre: Top positions in large organizations are very attractive.This is
because of the handsome compensation and rosy conditions of work they are able to offer their
employces especially those occupying management positions. Such attractive rewards are
difficult to get by most owners of small businesses.
Regular Income: Most people cannot cope with problems of irregular income. This may be due
to lack of adequate discipline in the management of money especially as this relates to
spending or consumption and savings. Such people would prefer salaried employment even if
the compensation is low. To them as long as the salaries can meet their basic needs they are
satisfied, especially when it is regular.
Regular Paid Vacations and Other Benefits: Other reasons some people prefer salaried
employment include regular paid vacations, fringe benefits, opportunity for sponsored training
and education, less responsibility because of limited demand on a worker's knowledge and
ability and other social benefits that enhance quality of work life.
Shorter Hours of Work: The preferences for salaried employment have been argued by many
to be related to shorter hours of work. The time to put is already stated in the terms and
conditions of employment. A small business owner-manager must put in his best to the service
of his business. This may mnean working round the clock.
Inability to take Risks: Risk is a fundamental part of business. Most people believe that the
higher the risk, the higher the probability of high profit, and the lower the risk, the lower the

11
profit. Although, this is not correct in the absolute sense, but some people cannot put their
money, time and effort in business venture for fear of loss. Such people are afraid to lose their
money through such risks as damages or loss in transit, fire, price collapse,pilferages,
expiration of product life in shelves, swindlers or corrupt practices of other businessmen and
natural disasters.
Lack of Business Acumen: Business acumen includes not only the skills required to succeed in
the desired line of business but other necessary physical, sociological and psychological
abilities to manage business resources, relationship with customers and suppliers and to handle
crisis. Most people avoid starting a business because they are not tough psychologically to
withstand the different tunes from business wind. Others do not have human relation skills to
interact with oth r people as owner/leader manager. Some do not have conceptual integrative
skills to understand the trends of environmental changes and diagnostic and problem-solving
skills.
Advantages of Salaried Employment
The advantages of paid-employment include the following:
 ·Challenging executive cadre with paid holidays
 ·The employee has fixed responsibility which he or she is accountable and paid for.
 ·The stress in paid-employment is lower because the employee in addition to fixed hours
of work may not necessarily take official work home.
 ·Employees are only exposed to minimum risks which may be loss of employment but
not loss of investment except in few cases where the employee has some shares in the
business.
 ·The chances of promotion with associated benefits is in most regular employment
especially in big organisations.
 ·Many networks of relationships can be built in working for big organization which may
create value for an employee.
 ·Regular wages or salaries makes planning easier for the employee and eliminates
negative emotional problems that are associated with irregular income of self-
employment.
Disadvantages of Salaried Employment
Salaried employment is associated with the following disadvantages:

12
 o ·The employee's income is relatively fixed and limited except in few cases such as sales
commissions that is determined by unit sold in addition to fixed salary.
o ·The use of discretion is somehow limited because the employee must follow the
established pattern of work in addition to order and instructions and policy.
o ·Employees mmay not be able to set their own schedule because the employer or their
managers have responsibility to establih work schedule.
o ·Each employee's responsibility is fixed and somctimes limited which may cause
monotony and boredom.
o ·Employces as subordinate workers has no power or authority over their superior. They
give full respects to superiors and has no right of saying no to any staff senior to him.
Rules, instructions and commands are imposed on subordinates.
o ·Employees are usually transferred from one position or geographic location to another
without consideration of their opinion, and sometimes with insufficient notice.
o ·Workers are retired when their time reaches or when for one reason or the other an
employee is forced by an executive to retire.
o ·In many cases some-unqualified persons are employed to handle difficult jobs requiring
dexterity for which they have no experience or qualification. The worker becomes
incompetent on the job or post. This wrong posting results to inefficiency and frustration
on the part of the worker which can inevitably lead to dismissal.
1.8 Preference for Self-employment
Many people that have chosen to be self-employed or started their own businesses gave so
many reasons for their decisions. Some of these include:
i. To maximise the advantages arising from the growth of the service sector..
ii. Favorable economic policies introduced by the new democratic government in the last
twenty years which have encouraged many people to start small businesses.
iii. Increased rate of unemployment, especially among young graduates has pushed many of
them to self-employment.
iv. Decrease in the purchasing power of the naira and increase in domestic expenditures has
pushed many people into the search for additional sources of income.
v. Self-employment has been considered by many husbands to be the best for their wives
because it allows them to spend more time with their families.

13
 vi. Most students in Nigerian higher institutions have developed unusual interest in small
business entrepreneurship due a number of reasons
vii. Most youths of today are generally adventurous; willing to try new ideas and maximize
their talents in competitive ways through small business ownership.More students are
now starting businesses while still in school to sponsor their educations and to meet
their personal needs.
viii. Today, many people have begun to realize that self-employment is the only path to the
economic security, financial prosperity, social and psychological satisfaction they so
much desire.
ix. Some of the people that are self-employed today were middle-level executives that
retired or were laid off from large businesses who wanted to put their management skills
and experience to work and augment their little severance pay which may not be enough
for their former employees.
Advantages of Self-Employment
The advantages of self-employment include the following:
o ·The entrepreneur or business owner does not need any academic qualifications to start
and operate his or her business.
o ·There no ceiling to the income of the self-employed because his or her income depends
on the performance of the business.
o The entrepreneur sets his or her work schedules.
o ·The individual has flexible work hour; resumption and closing time is determined by the
individual.
o ·No specified dress code for the business owner except that which is suitable for customers
and acceptable to the particular society.
 ·The business owner gives orders and instructions unlike in regular employment when
people are subjected to various rules and regulations that may not be reasonable at
times.
 ·There is opportunity or freedom to implement your ideas instead of struggling for the
acceptance of ideas as intrapreneurs in other organisations.
 ·The employment of the self-employed is relatively secured because you decide when
to retire.

14
 The entrepreneur occupies the leadership position in the enterprise and as a result
he/she derives psychological satisfaction and is better able to maximise all personal
potentials.
 ·There is the higher possibility of achieving respect in the society and financial
independence.
 ·The feelings that the self-employed is contributing to the socio-economic development
of the society gives him/her some sense of fulfillment.
Disadvantages of Self-employment
The disadvantages of self-employment are enumerated below:
 ·The entrepreneur needs adequate capital to start the business which may be difficult to
get and raising external capital for a business is associated with costs such as interests
and ownership dilution and control.
 ·The responsibility of running the business is very wide which usually contributes .to
stress for the business owner.
 ·Uncertainty of the future can mean financial insecurity because the business owner may
not earn pension and his future financial fortune depends on the success of the business.
 The income of self-employed individual is not guaranteed and regular because the
business environment is dynamic.
 Higher risks are associated with self-employment because the owner is the one who
bears all of the business risks except those that are insured and even at that insurance
cover is not free.
 Hours of work of the self-employed is not fixed and as the owner he or she needs to work
long hours on daily basis in most cases which can result in negative consequences for
his/her health and family.
 ·The success of your business does not depend on only you but the employees who may
not be honest and competent enough to take some decisions and actions when you need
it or absent from the office.

15