1.1.2
Risk & Reward
Risk and Reward
Risk and Reward
Entrepreneurs, and the businesses they start, face risk and reward.


Risk
Risk
- A business may not succeed for a number of reasons. Starting a business is risky.


Reward
Reward
- If a business succeeds, there may be a big financial or emotional reward.
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.
Reward
Reward
Businesses and entrepreneurs can also benefit from great rewards.


Financial reward
Financial reward
- If a business is successful then an entrepreneur is able to make a profit.
- They also may be able to sell the business for a large sum in the future.


Be their own boss
Be their own boss
- Setting up your own business means that you can work for yourself.
- This means that you are likely to have more flexible working hours and more choice over the type of work that you do.


Dissatisfaction with their current job
Dissatisfaction with their current job
- Many entrepreneurs have had full time jobs in the past that they haven’t enjoyed which has led them to pursue their own idea.


Pursue an interest
Pursue an interest
- Some entrepreneurs simply want to set up a business doing something that they are passionate about.
1Investigating Small Business
1.1Enterprise & Entrepreneurship
1.2Spotting a Business Opportunity
1.2.1Customer Needs
1.2.2Market Research
1.2.3Market Segmentation
1.2.4The Competitive Environment
1.2.5Primary & Secondary Market Research
1.2.6End of Topic Test - Business Opportunities
1.2.7Application Questions - Business Opportunities
1.2.8Exam-Style Questions - Market Segmentation
1.2.9Diagnostic Misconceptions - Competition
1.3Putting a Business Idea into Practice
1.3.1Business Aims
1.3.2Business Objectives
1.3.3Business Revenues & Costs
1.3.4Costs - Calculations
1.3.5Revenue - Calculations
1.3.6Business Profits & Break-Even Analysis
1.3.7Profits & Losses - Calculations
1.3.8Interest - Calculations
1.3.9Cash & Cash Flow
1.3.10Cash & Cash Flow 2
1.3.11Cash Flow - Calculations
1.3.12Sources of Business Finance
1.3.13End of Topic Test - Business in Practice
1.3.14Grade 9 - Business in Practice
1.3.15Exam-Style Questions - Business in Practice
1.3.16Diagnostic Misconceptions - Profit
1.3.17Diagnostic Misconceptions - Company vs Business
1.3.18Diagnostic Misconceptions - Economies of Scale
1.3.19Diagnostic Misconceptions - Cash Flow
1.3.20Diagnostic Misconceptions - Break-even
1.3.21Diagnostic Misconceptions - Fixed Costs
1.4Making the Business Effective
1.5Business Stakeholders
2Building a Business
2.1Growing the Business
2.2Making Marketing Decisions
2.2.1Product
2.2.2Product Life Cycle
2.2.3Price
2.2.4Pricing Methods
2.2.5End of Topic Test - Product & Price
2.2.6Grade 9 - Product & Price
2.2.7Promotion & Advertising
2.2.8PR & Sales Promotions
2.2.9Sponsorship & Product Placement
2.2.10Promotional Mix
2.2.11End of Topic Test - Promotion
2.2.12Application Questions - Promotion
2.2.13Exam-Style Questions - Promotional Mix
2.2.14Place & Wholesalers
2.2.15Direct to Consumer
2.2.16E-commerce & M-commerce
2.2.17Diagnostic Misconceptions - Decreasing Price
2.2.18Diagnostic Misconceptions - Advertise vs Promote
2.2.19Diagnostic Misconceptions - Social Media
2.3Making Operational Decisions
2.3.1Job Production
2.3.2Batch & Flow Production
2.3.3Working with Suppliers
2.3.4Effective Supply Chains
2.3.5Just In Time & Just In Case
2.3.6Managing Quality
2.3.7Total Quality Management
2.3.8The Sales Process
2.3.9End of Topic Test - Operational Decisions
2.3.10Grade 9 - Operational Decisions
2.3.11Exam-Style Questions - Managing Stock
2.3.12Diagnostic Misconceptions - JIT vs JIC
2.4Making Financial Decisions
2.5Making Human Resource Decisions
2.5.1Organisational Structures
2.5.2Organisational Structures 2
2.5.3Recruitment
2.5.4Effective Recruitment
2.5.5Training a Workforce
2.5.6Motivating a Workforce
2.5.7End of Topic Tests - Human Resources
2.5.8Application Questions - Human Resources
2.5.9Exam-Style Questions - Human Resources
2.5.10Diagnostic Misconceptions - Owners vs Shareholders
2.5.11Diagnostic Misconceptions - Internal Recruitment
2.5.12Diagnostic Misconceptions - Employee Motivation
Jump to other topics
1Investigating Small Business
1.1Enterprise & Entrepreneurship
1.2Spotting a Business Opportunity
1.2.1Customer Needs
1.2.2Market Research
1.2.3Market Segmentation
1.2.4The Competitive Environment
1.2.5Primary & Secondary Market Research
1.2.6End of Topic Test - Business Opportunities
1.2.7Application Questions - Business Opportunities
1.2.8Exam-Style Questions - Market Segmentation
1.2.9Diagnostic Misconceptions - Competition
1.3Putting a Business Idea into Practice
1.3.1Business Aims
1.3.2Business Objectives
1.3.3Business Revenues & Costs
1.3.4Costs - Calculations
1.3.5Revenue - Calculations
1.3.6Business Profits & Break-Even Analysis
1.3.7Profits & Losses - Calculations
1.3.8Interest - Calculations
1.3.9Cash & Cash Flow
1.3.10Cash & Cash Flow 2
1.3.11Cash Flow - Calculations
1.3.12Sources of Business Finance
1.3.13End of Topic Test - Business in Practice
1.3.14Grade 9 - Business in Practice
1.3.15Exam-Style Questions - Business in Practice
1.3.16Diagnostic Misconceptions - Profit
1.3.17Diagnostic Misconceptions - Company vs Business
1.3.18Diagnostic Misconceptions - Economies of Scale
1.3.19Diagnostic Misconceptions - Cash Flow
1.3.20Diagnostic Misconceptions - Break-even
1.3.21Diagnostic Misconceptions - Fixed Costs
1.4Making the Business Effective
1.5Business Stakeholders
2Building a Business
2.1Growing the Business
2.2Making Marketing Decisions
2.2.1Product
2.2.2Product Life Cycle
2.2.3Price
2.2.4Pricing Methods
2.2.5End of Topic Test - Product & Price
2.2.6Grade 9 - Product & Price
2.2.7Promotion & Advertising
2.2.8PR & Sales Promotions
2.2.9Sponsorship & Product Placement
2.2.10Promotional Mix
2.2.11End of Topic Test - Promotion
2.2.12Application Questions - Promotion
2.2.13Exam-Style Questions - Promotional Mix
2.2.14Place & Wholesalers
2.2.15Direct to Consumer
2.2.16E-commerce & M-commerce
2.2.17Diagnostic Misconceptions - Decreasing Price
2.2.18Diagnostic Misconceptions - Advertise vs Promote
2.2.19Diagnostic Misconceptions - Social Media
2.3Making Operational Decisions
2.3.1Job Production
2.3.2Batch & Flow Production
2.3.3Working with Suppliers
2.3.4Effective Supply Chains
2.3.5Just In Time & Just In Case
2.3.6Managing Quality
2.3.7Total Quality Management
2.3.8The Sales Process
2.3.9End of Topic Test - Operational Decisions
2.3.10Grade 9 - Operational Decisions
2.3.11Exam-Style Questions - Managing Stock
2.3.12Diagnostic Misconceptions - JIT vs JIC
2.4Making Financial Decisions
2.5Making Human Resource Decisions
2.5.1Organisational Structures
2.5.2Organisational Structures 2
2.5.3Recruitment
2.5.4Effective Recruitment
2.5.5Training a Workforce
2.5.6Motivating a Workforce
2.5.7End of Topic Tests - Human Resources
2.5.8Application Questions - Human Resources
2.5.9Exam-Style Questions - Human Resources
2.5.10Diagnostic Misconceptions - Owners vs Shareholders
2.5.11Diagnostic Misconceptions - Internal Recruitment
2.5.12Diagnostic Misconceptions - Employee Motivation
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