3 Psychological Risks To Consider When You Start Your Own Business

June 6, 2022

 According to a survey run by Digital.com, over 40% of Americans plan to start a business in 2022. Among those who have already launched their side hustle venture, more than half of new entrepreneurs plan to quit their 9-to-5 jobs within the next year to concentrate fully on their business. These exciting figures show that the pandemic has not tamed the American entrepreneurial spirit one bit! 

However, the survey forgets to mention how many new businesses fail. Indeed, more and more Americans take preventive steps when starting a venture. It isn't uncommon to take business classes to prepare ahead for the task of becoming an entrepreneur. As a result, most people who are considering starting a company already have:

  • A business plan

  • Some level of market research

  • Financing solution

Indeed, lack of strategy, market understanding, and capital are the top three most frequently cited reasons for a business collapse. However, there are psychologically-influenced risks that new entrepreneurs need to prepare for:

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Learning to take responsibility

We've all been there as a child: You've been goofing around at home, and suddenly, you broke your mother's vase. Taking responsibility is a difficult skill to learn. But if, as a child, you confessed the mishap and apologized to your parents for breaking the vase, you probably already understood the concept of responsibility. For businesses, it is the same phenomenon. Owning your faults and trying to make amends is the hardest lesson you've got to learn. Thankfully, businesses can rely on their liability insurance policy — you can turn to a platform such as coterie, to find the right policy for you — to help cover the costs. As a business, it's essential to secure the relevant insurance policy for your needs so you can compensate customers for issues. Otherwise, it could affect your reputation and credibility. 

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Managing stress

Let's be honest: Working for yourself is stressful. As an entrepreneur, you are likely to face new stressors, so it's important to identify them so you can find the most appropriate responses. Learning relaxation techniques can be a game-changer when you manage a company. Stress is the number one killer for entrepreneurs, so it's certainly not something you can take lightly. You can build a supportive network to help you, such as a team of talented advisors, business mentors, and even a counselor. 

Learning to focus on your audience group

Running a business is not the right career choice for people pleasers. Indeed, an entrepreneur must learn to make decisions that will likely cause the displeasure of some. It's important to be clear about your audience group from the start because you can't please everyone. 

Trying to meet the expectation of a broad audience can affect your brand reputation, messaging, and profitability. Therefore, you must be ready to neglect a portion of the market that doesn't meet your customers' persona. Too many small businesses lose themselves in an effort to attract a wide audience, which means they compete against a variety of other companies. 

In conclusion, psychological factors such as high stress, lack of responsibility, and the desire to please everyone, can have a dramatic consequence on your entrepreneurial aspirations. If you are considering launching a business this year, take time to focus on your entrepreneur's personality too!  


*contributed post*

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