1.3.9
Risk & Uncertainty
Risks
Risks
The entrepreneurs that start businesses face a lot of risk. Some of the risks are:


Risk of failure
Risk of failure
- Starting a new company is very risky as they are most likely to fail in their early days.
- They face the risk that consumers may not want to buy their product, especially if it is a brand new product.


Financial loss
Financial loss
- Starting a new business often requires a lot of investment. Failure can often mean a large financial loss for the entrepreneur.


Lack of security
Lack of security
- Entrepreneurs often lose the security that they had with their job in terms of a regular wage or salary.
- This means that if the business isn’t making any profit, the entrepreneur may have no money to live off.
Uncertainty
Uncertainty
Uncertainty is not identical to risk.


What do we mean by uncertainty?
What do we mean by uncertainty?
- Uncertainty is when a business cannot know how a situation will turn out.
- This is mostly because the business does not have enough information.


Brexit
Brexit
- Brexit has caused uncertainty for businesses.
- This is because they do not know how they will be affected by Britain leaving the EU.


Uncertainty vs. risk
Uncertainty vs. risk
- Uncertainty is where a business is unable to foresee problems.
- Risk is where there is a chance that something could go wrong & not end up as expected.
- With uncertainty, it is hard to even have any expectations of what the future will be like.
1Exploring Business
1.1Features of Business Organisations
1.2Organisation of Businesses
1.3Business Environment
1.3.1External Influences
1.3.2Political & Legal Change
1.3.3Economic Environment
1.3.4Social & Technological Environment
1.3.5Lifestyle & Technological Environment
1.3.6Corporate Social Responsibility
1.3.7The Competitive Environment
1.3.8Innovation
1.3.9Risk & Uncertainty
1.3.10Porter's Five Forces
1.3.11SWOT Analysis
2Marketing Campaigns
2.1Marketing
3Business Finance
3.1Sources of Finance
3.2Financial Planning
3.3Financial Statements
4International Business
4.1Globalisation
4.2International Business
4.3International Economic Environment
4.4Factors Affecting International Business
5Principles of Management
5.1Management & Leadership
5.2Theories of Motivation
6Business Decision Making
6.1Business Principles & Practices
6.2Quality Management
6.3Human Resources
6.4Documents & Business Decisions
Jump to other topics
1Exploring Business
1.1Features of Business Organisations
1.2Organisation of Businesses
1.3Business Environment
1.3.1External Influences
1.3.2Political & Legal Change
1.3.3Economic Environment
1.3.4Social & Technological Environment
1.3.5Lifestyle & Technological Environment
1.3.6Corporate Social Responsibility
1.3.7The Competitive Environment
1.3.8Innovation
1.3.9Risk & Uncertainty
1.3.10Porter's Five Forces
1.3.11SWOT Analysis
2Marketing Campaigns
2.1Marketing
3Business Finance
3.1Sources of Finance
3.2Financial Planning
3.3Financial Statements
4International Business
4.1Globalisation
4.2International Business
4.3International Economic Environment
4.4Factors Affecting International Business
5Principles of Management
5.1Management & Leadership
5.2Theories of Motivation
6Business Decision Making
6.1Business Principles & Practices
6.2Quality Management
6.3Human Resources
6.4Documents & Business Decisions
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