1.1.2 Risk and Reward Flashcards
What happens when a business fail to plan
If a business fails to plan for the future it may risk losing out to competitors
What is the chance of failure in a new small business start up
20% fail in their first year
30% fail in their second year
50% fail after five years in business
70% of small business owners fail in their 10th year in business.
What is one of the reasons for business failure
Uncontrolled growth
What is a financial risk for starting a new business
If the business is sole trader or partnership then they have “unlimited liability” which means they could lose their personal assets to pay the business debts
What is a security risk for starting a new business
They may have a mortgage, a car and other bills to pay
What is a reward for a new business
Success
What is a reward for starting a new business with profit
A reward of setting up your own business is you get to keep all the profit that the business makes
What is a reward of a new business with independence
A reward of setting up your own business is that you could be your own boss
What is a risk
Business failure, financial loss, lack of security
What is a reward
Business success, profit, independence
What is a business reward
A business reward is a benefit that it brings to the owner
