1.1.2 Risk and Reward

Question 1

Risk?

Answer 1

business failure, financial loss, lack of security

Question 2

Reward?

Answer 2

business success, profit, independence

Question 3

Business Failure

Answer 3

If a business fails to plan for the
future it may risk losing out to
competitors

Question 4

Financial Risks

Answer 4

The owner may put their own
cash and other assets (e.g. a
van) into a 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

Question 5

Lack of security

Answer 5

If an entrepreneur has a
regular job, and they decide
to leave that job to open
their own business this is a
huge risk

They may have a mortgage,
a car and other bills to pay

Also there may be insecurity
of sales with falling
consumer incomes

Question 6

Business Reward

Answer 6

A business reward is a benefit that it brings to the
owner e.g. better working conditions