Who assumes the risk in starting a new business?

The entrepreneur is the individual who assumes the risk in starting a new business. This role involves more than just having an idea; it means taking on the responsibility for the business’s operations, finances, and overall success or failure. Entrepreneurs invest their own resources, including time and capital, into developing their business concept, and they are ultimately accountable for the decisions that will determine the fate of the enterprise.

They face various risks, such as market uncertainties, economic fluctuations, competition, and operational challenges, making their commitment to the business inherently risky. While investors may provide funding and managers may run the day-to-day operations, it is the entrepreneur who is usually the most exposed to the potential losses and gains resulting from the business's performance. This critical role makes entrepreneurs the primary risk-takers in the entrepreneurial process.