What type of risk does an entrepreneur commonly assume in a business?

An entrepreneur commonly assumes financial and operational risk when starting and managing a business. Financial risk involves the potential loss of financial resources due to various factors such as poor financial management, changes in market conditions, or unexpected expenses. Operational risk refers to risks related to the internal processes and systems of the business, which can impact operational efficiency and effectiveness. This could include risks associated with supply chain management, staff performance, and production processes, all of which directly affect the overall success of the business.

While human resource risk, market risk, and technology risk can also be significant, they are often subsets or specific examples of the broader financial and operational risks that an entrepreneur faces. For instance, market risk can influence financial outcomes, and technology risk can affect operational capabilities. However, focusing on the dual aspect of financial and operational risk provides a more comprehensive view of the overall risks that entrepreneurs typically navigate in the context of running their businesses.