The Perception of Business Risks by Entrepreneurs Based on their Experience of Business Failure

The aim of the article is to compare the attitudes to business risks and business failure among entrepreneurs that have experience with bankruptcy and entrepreneurs that do not have experience with bankruptcy in the business environment of small and medium-sized enterprises. The main objective of the article is to evaluate business risks: market, economic, financial, strategic, personnel, legal, and operational risk; and statements about the experience with business failure. Questionnaires of 454 small and medium-sized enterprises were collected and prepared for evaluation in 2020. Statistical hypotheses were rejected through the statistical method Z- test. The results showed interesting findings. The most important business risks are the market, financial, and personnel risk according to entrepreneurs. Entrepreneurs without the experience of business failure have more positive attitudes (66.7%), and there is no risk of bankruptcy to their company for 5 years than entrepreneurs with experience of business failure (45.2%). The next finding is that entrepreneurs without the experience of business failure have more positive attitudes (60.6%) to the rate of the market risk (lack of sales for my company) as adequate than entrepreneurs with experience with business failure (38.4%). Also, it was shown that entrepreneurs without experience with business failure have more positive attitudes (59.8%) to the error rate of employees, which is low and has no negative impact on my (our) business than entrepreneurs with experience of business failure (53.4%).