Your own business: a case study on its risks and rewards


Entrepreneurial ventures are a vital part of the economy. For the individual entrepreneur there is the potential to fulfill dreams and become financially independent. Over time, we’ve seen entrepreneurial businesses become powerhouses, but also seemingly successful businesses that went down the drain. An interesting observation is that entrepreneurs in successful businesses sometimes feel unhappy and even depressed. This case study highlights the various risks and rewards experienced by some of these entrepreneurs (names are fictitious).

when everything goes wrong

Eric was in his mid-40s when a business opportunity presented itself. He was an accountant by profession and held a high position in a medium-sized company. He was offered a new franchise in the auto industry in another city. The opportunity was too good to ignore. Eric quit, sold his house and took the money to start the business.

The franchise did not turn out to be what was promised. The franchisor was not very honest and Eric was not an entrepreneur at heart. He was passionate about cars, but not the more technical aspects of them. In the end, the following potential risks became a reality and had serious consequences:

  • Social risk. When Eric and his wife left town, they left their support structure and circle of friends behind. He worked long hours to build the business. Regular and enjoyable weekend socials were a thing of the past. His teenage daughter also had serious problems that were difficult for them to cope with.
  • Financial risk. Eventually the business collapsed and Eric was declared bankrupt. At this stage he was in his early fifties.
  • career risk. Eric quit a good job with a good pension fund. When it all turned sour, he tried to go back to his old company. There were no vacancies. He took a lower-paying job as an operations manager at a small entrepreneurial firm.
  • Psychological risk. Eventually too many things went wrong with Eric. He got divorced, today he is very bitter and often comments that he needs to work until the day he dies.

It’s worth it?

Jack was in his mid-thirties when he and his partners were given the opportunity to make a purchase by the management of the manufacturing company they worked for. Over the past seven years, they have taken the company from a loss to a company that is doing exceptionally well. Outsiders would say this is the ideal situation to be in. Jack is experiencing the following reward:

  • financial rewards. Jack became a millionaire in dollars. He always lived within his means and he and his family can easily live without having to work another day in his life.

Unfortunately, Jack is also caught in a no-win situation. He feels that the price he pays for the financial rewards is too high. He often expresses the following negative impacts on his life:

  • Social risks. Jack had been out of the country for so long that he became alienated from his friends and family. He feels that he was not there for his father when he passed away on one of these trips. He also feels that his children are growing up and he is not there to experience it.
  • psychological risks. Jack finds it difficult to balance the work situation and his personal life. At this stage he has a serious problem with depression. Fortunately, his colleagues support him exceptionally well and have formulated a plan for all of them to leave the business in the near future.

The fruits of success

Marc is a serial entrepreneur who started his first business in his twenties two decades ago. He is very ambitious, he made several mistakes and went bankrupt twice. Six years ago he started a business in a niche area of ​​real estate development. He has an absolute passion for this line of business and in a short time he became very successful. He really enjoys his success and believes all the risks and hard work were worth it. He experiences the rewards from him in the following way:

  • financial rewards. Marc is worth several million dollars and he used enough of this money to earn a passive income that allows him and his family a life of luxury.
  • Social rewards. Marc was always a very social person and managed to keep his social life intact. Today he enjoys much of his social activities with friends on foreign trips and at his vacation farm and beach house.
  • Inofpencilofnce rewards. Marc always enjoyed being his own boss. He often said that he would rather sleep in a park than work for someone else. In the end, this attitude and determination paid off.
  • Growth rewards. On a personal level, Marc took the opportunity to grow as a person. He learned to fly, he studied a lot on his own to improve himself and people respect him in all walks of life.
  • Contribution Awards. The ultimate reward is the ability to give. Marc is giving a large portion of his time and money to charity.


Having your own business really can be the best thing you can do (for yourself and others). However, it is very important to look at it objectively and make sure it fits your personality and risk profile. Entrepreneurship is not for everyone. The potential rewards must be weighed against the potential risks.

Copyright© 2008 – Wim Venter

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