Business- risk and reward

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