1.1.2 Risk and reward Flashcards
How can a risk be reduced?
Entrepreneur can address risks during the development stage of a new business idea
What can risks include?
business failure
Financial loss
Lack of security
What can cause business failure?
Entrepreneurs not knowing their market well
not having enough money to start a business
Poor decision making
Competition or goods/services not meeting the needs of customers
What are the riskiest startup option?
Sole traders
Partnerships
Both have unlimited liability
What can business owners lose?
Personal possessions
What should entrepreneurs conduct before starting up their business?
Market research to understand how their product will/will not meet customer needs
What can rewards include?
Business success
Profit
Personal independence
What is profit?
The difference between the revenue earned by a business and the costs of a business
