1.1.2 risk and reward Flashcards
Business
failure
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 start-up?
20% of small businesses fail in their
first year
30% of small business fail in their
second year
Financial risks
The owner may put their own
cash and other assets (e.g. a
van) into a business
Lack of security
If an entrepreneur has a
regular job, and they decide
to leave that job to open
their own business this is a
huge risk
Definition: Business rewards
Not everyone defines reward the same way. For
some it might be seeing a new venture grow and
succeed. For others it may be conquering the
unknown and striking out on their own
Business success
This may mean; awards,
fame, survival, growth or
making more money than
they would working for
someone else
Keep all the profit
A reward of setting up your own
business is you get to keep all
the profit that the business
makes
Independence
A reward of setting up your own business is that you could be your
own boss
Being your own boss means you get to make the major decisions in
the business