risks in business Flashcards
1
Q
working out risk
A
considering the probabillity of a negative outcome occuring and the impact of the outcome.
starting any business involves risk due to unknown factors.
2
Q
RISK: business failure
A
through poor cash flow, fall in sales revenue or competitor action
3
Q
RISK: financial loss
A
owner may lose capital they invest. this could include personal belongings if the business has unlimited liabillity.
4
Q
RISK: lack of security
A
not working for someone means no guaranteed income, sick pay or holidays.
5
Q
what makes other businesses riskier than others?
A
- seasonal demand
- highly competitive market
- an owner with little knowledge regarding their product or market
6
Q
how can risk be reduced?
A
- carry out detailed market reasearch
- produce a business plan
- ensure the business is competitive
- raise sufficient start-up finance
