1.1.2 Risk and reward Flashcards
What is risk?
business failure, financial loss, lack of security
What is reward?
business success, profit, independence
Business rewards
A business reward is a benefit that it brings to the
owner e.g. better working conditions
rewards of being your own manager
Being your own boss means you get to make the major decisions in
the business
Many people would like to have this degree of control in their
working lives, which motivates them to start their own business
Financial risks
The owner may put their own
cash and other assets (e.g. a
van) into a business
if the business is sole trader or
partnership then they have
“unlimited liability” which
means they could lose their
personal assets to pay the
Keep all the profit
In time equipment may break or
get old and you may need to
invest some of your profit back
into the business
If you take on a business partner
you may also need to share the
profits with them
what is profit?
Profit = Total revenue – Total
costs
Some of the most common and basic expectations customers have for most
businesses include:
Fast, efficient and accurate service
High quality products at a competitive price
Friendly, helpful service staff to provide information and answer questions
Prompt responses to their inquiries, whether online, by phone or in person
Sufficient stock to meet their needs without long waits
A trained staff that can handle their questions without referring them on
A clean shop or easy to navigate website
