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Risk vs reward
The idea of comparing the best possible outcome and the worst possible outcome
Independence
The business owners want to have control over your own business and the decision it makes
Risk
Risk is the chance of something happening, the risk of this is the chance that something goes wrong
1 in 5 new products is a success
Calculated risk
Calculated risk is about putting a numerical value or probability on the risk, it is looking at the chance of something negative happening
Business failure
The owner and/ or family lose their savings leading family breakdown
Financial loss
Unlimited liability where the sole trader has to pay for any debts the business has
Lack of financial security
Working for yourself means an income that varies a lot but responsibilities often stay the same. E.g credit card debts or mortgage
Risk of rapid growth
Overtrading- where the sales grow faster than the business can cope with it
Struggle to cope with rapid increase in staff
Struggles for the owner to be a good manager of staff
Complacency- success that leads the owner making errors
