1.1.2 risk and reward

• 3 risks a business may face?

  • financial loss
  • business failure
  • lack of security
• possible risks (at the start)

  • identifying a market gap big enough to be profitable
  • raising enough capital
• possible risks (early days)

  • gaining loyal customers
  • coping with competition
• possible risks (when growth is rapid)

  • sales growing faster than can be dealt with
  • struggling to manage rapid rises in staff
• 3 rewards

  • business success
  • profit
  • independence
• how to minimise risks?

  1. market research
  2. revenue forecasts