Risk and Reward: Business: Pearson (Edexcel): GCSE (9:1)

Risk

The chance that something will happen or the chance of a particular outcome

Reward

Positive benefits from an activity

Success rate of new products

One in 5 (20%)

Failure rate of new businesses

50% fail in the first 5 years

Business failure

The collapse of a business, when it can't trade anymore

Independence

Being able to freely make decisions

Risk and reward

The balance between the best outcome and the worst outcome

Financial loss

Loss of money or decrease in financial value

Debt

Money owed

Profit and wealth

A net gain in money over a set period of time, financial benefit

Business success

When a business is making a profit or achieving its aims and objectives

Lack of financial security

when you can't predict how much revenue or profit a business will make

Ways to minimise risk

Develop a business plan, do market research, raise enough capital

Start-up period

The time when a business is starting to operate, developing systems and testing the market - a high-risk stage

Incentive

A reward for doing something