Course: - Entrepreneurship for Engineers (CEng 5222)

Individual Assignment
Semester: - 3rd Sem. 2022/23
Submission date: - on final exam date

EXERCISE: EVALUATING START-UP RISK

Read the following start-up failure story and reflect on the type of risk faced
by the founders. If you are asked for an advice what set of advice what set of
advice would you give to the founders to minimize the risks.

Case study #1 an entrepreneur’s journey

Ahmed graduated from Adama Science and Technology University with a

degree in electrical engineering in 2007 G.C. He had a passion for electronics
maintenance and always wanted to start business in electronic maintenance.
Upon his graduation, he realized a huge opportunity for mobile maintenance
business in Adama- he only spotted a handful of maintenance shops in the
town with staggering demand. However, he was unprepared at that time since
he did not have the required know- how of the business and skills in mobile
maintenance. Although short term down to earth training courses on mobile
maintenance were available in Addis at that time ahmed did nothing to enroll
himself in those training courses. Unemployed at the time, a pressure from his
family drove him to seek a hob opportunity and finally got offer at ehtio-
telecom.

Three years after working in ehio-telecom as a junior engineer, his life did not
improve much. Frustrated, he decided to leave the company and start his own
business. This did all required home- work to open a mobile repair shop –
obtained the required capital and enrolled in an intensive course in mobile
maintenance. He started – off the business in a busy district of the town where
similar several shops were established. The stiff competition coupled with
lack of business experience means Ahmed had to struggle for a year before he
gets the hang of the business. After two a year in the business he discovered
that the business barely generates profit. Frustrated by the bad experience he
decided to sell – off the business and return to the job he left.

Case study #2 – an entrepreneur’s journey

Tedros and Abel are graduates of Civil engineering from Addis Ababa
University who have been working in a construction company since 2009 G.C.
unsatisfied with the pay and the working condition, the two young decided to
leave the company in 2014GC to start their own business. Tedros is very much
inspired by the success story of his old friend from high school years who has
been engaged in beef farming since 2010, and has since made a good fortune
out of it. His friend who is a graduate in animal science has got years of
accumulated business experience. Tedros thought that since he and his friend
Abel have got sufficient capital, they too will succeed in the same business.
Hence, he discussed the proposal with Abel and the two agreed to go ahead
with the plan. They started off by supplying beef to local hotels and
restaurants.

Since they didn’t have known – how on how to select best cattle for meat their
business lost close to 40% of the initial capital within a year. Seeing they can
no longer continue in the business, they eventually decided to sell off and
close it.