What is entrepreneurial risk?

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Business risks are obstacles that a company may encounter. They often lead to negative consequences for the business:

Decrease in profit compared to planned indicators
For example, a company that purchased a batch of raw materials before opening expected to sell 500 items in the first month of operation. At the same time, the management expected to receive a profit of 100 thousand rubles.

Decrease in profit compared to planned christian churches email list indicators

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However, due to a seven-day delay in the delivery of raw materials, which arose due to force majeure circumstances, the company was able to sell only half of the planned volume - 250 goods. As a result, the actual profit was reduced to 50 thousand rubles.

Unforeseen losses
For example, a person decided to open a business, but a month after starting work, a fire broke out in the room above and his studio was flooded. This led to unexpected losses: he had to buy new tools, change furniture and cancel client visits for several days.

Such losses can affect the company's reputation, degrade the quality of services, violate agreements with partners and even lead to the liquidation of the business.

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Types of entrepreneurial risk
There are several types of business risks that entrepreneurs may face:

Political risks are associated with a change in power or a deterioration in the situation of individual political groups.

Legislative business risks arise as a result of changes in laws that may entail additional costs for entrepreneurs. For example, the introduction of mandatory labeling for some goods may require the purchase of special equipment, payment for participation in the relevant system, as well as changes in internal production processes or the hiring of new employees, which entails additional costs for their salaries.

Natural risks include the impact of natural disasters and catastrophes that can destroy infrastructure or paralyze the operations of enterprises in affected regions.

Macroeconomic business risks depend on the state of the economy not only within the country but also at the global level. This includes inflation, exchange rate fluctuations and other economic changes that can negatively affect business.

Each of these risks can be divided into more specific categories, the most common of which include:

Financial risks
They arise if the entrepreneur's activities are related to monetary transactions, securities or currency. Among financial entrepreneurial risks, several subcategories are distinguished:

Currency risks are related to fluctuations in exchange rates, which can change in a short period of time. This is especially important in transactions with foreign partners, when the difference in rates can significantly affect the results of financial transactions.

Credit risks arise when a borrower is unable to repay a loan on time.

Investment risks relate to investments whose returns may not meet expectations. This happens for various reasons. For example, investments may be needed elsewhere before their payback period is over, or inflation may significantly reduce the returns on these investments.

Commercial entrepreneurial risks
They are related to the very essence of trading activities. These may be cases of damage to goods, problems with their quality, difficulties in transportation or sale of products, which may negatively affect the business.