risk and reward

• Risk and reward-the balance btw the worst that can happen and the best that can happen
• Impact of risk and reward on business activity:

  • Risk-business failure,financial loss, lack of security
  • Reward-business success,profit,independence
• Risks that might go wrong in businesses;

  • growing too fast
  • coping with a growing workforce
  • coping with competition
  • building a customer base
  • raising enough capital
  • getting the RIGHT people to work in the RIGHT way
  • running out of cash in quiet times
  • etc....
• Risk and reward -

  • uncertainty that things might go wrong with negative consequences, but rewards can come from taking risks if done in the right way
• the impact of risks and their consequences:

  • business failure
  • financial loss
  • lack of security
• Business failure:

  • financial consequences
  • entrepreneur's reputation is damaged
  • a lot of stress
  • personal pressures for the entrepreneur and their family
  • suffer from bad self-esteem-take a major hit
• Financial loss-

  • owners are liable for any debts
  • owner might lose all the money they invested
  • for smaller businesses like (partnerships or sole traders)the owners might lose personal assets
• Lack of security-

  • giving up the safety of your job
  • entrepreneur lose money so can't pay mortgages or pay for kids
  • comes with being an employee rather than an entrepreneur
• Business success:

  • entrepreneur are happy as a business is successful
  • entrepreneur keep starting more businesses as they are not fully content or to feel at triumph
  • they are happy as they have overcome risks by the will of Allah(swt)
• Profit-

  • Everyone wants to become rich
  • many sell the business to larger firms or shareholders via the stock market
• Independence-

  • people hate being asked what to do or when given order
  • want to become their boss
  • reward for some