risk and reward Flashcards
what is 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
50% of small businesses fail after five
years in business
70% of small business owners fail in
their 10th year in business.
Financial risks
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
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
Business rewards
A business reward is a benefit that it brings to the owner e.g. better working conditions
Business success
The rewards of a good
business is success. This may mean; awards,
fame, survival, growth
Keep all the profit
Profit = Total revenue – Total
costs
Independence
Being your own boss means you get to make the major decisions in
the business
Case study: Patisserie Valerie
Well-known French themed
cafes has gone into
administration
71 loss making cafes have closed
Risky business
Homebase
Woolworths
BHS
Staples
Toys R Us
