Business risks and its features

APRIL 27, 2020
DAY 5

Good morning boys! Let us start a new topic today i.e meaning of business risks and its features.

LEARNING OUTCOMES-At the end of the topic, students will be able to:
a) State the meaning of business risk with examples.
b) Explain the features or characteristics of business risks.

WATCH THE VIDEO GIVEN BELOW FIRST:

WRITE THE MEANING AND FEATURES OF BUSINESS RISKS:



Q.16 What do you mean by business risks? Explain its nature or features. (5)
Ans- Business risk arises due to uncertainties  or unexpected events which involves either a possibility of inadequate profits or even losses. For example- change in prices , change in demand , change in taste and preferences of consumers, etc.

 Nature or features of business risk are as follows-
1. Risk arises due to uncertainties-
a) Business is at risk due to lack of knowledge about events which will happen in future.
b) For example- change in demand,  change in technology,  government policies, etc.
2 . Risk is an integral part of business-
a) No business can function without taking risk.
b)All business activities are based on forecast , so business risk can be minimised but it can never be eliminated.
3. Risk depends on nature and size of business-
a) Nature and size of business decides the amount of investments, need of funds for day to day expenses, etc.
b) Larger the size of business, larger the risk involved. For example- Business dealing in fashion products has more risk as compared to business dealing in consumable items.
4.Risk taking is rewarded in the form of profits-
a) It is always said ' No Gain Without Pain.'
b) Entrepreneur undertakes risks under the expectation of higher profits. Greater the risk, higher is the chance of profit

GOD BLESS YOU ALL!