Entrepreneurship as Innovation and Problem Solving — Entrepreneurship STD 11 Commerce — Question

Every business organization contains various risk elements while doing the business. Business risks implies uncertainty in profits or danger of loss and the events that could pose a risk due to some unforseen events in fugure, which causes business to fail. The Business risk is classified into different 5 main types:

1. Strategic Risk: They are the risks associated with the operations of that particular industry. These kind of risks arise from

• Business Environment: Buyers and sellers interacting to buy and sell goods and services, changes in supply and demand, competitive structures and introduction of new technologies.
• Transaction: Assets relocation of mergers and acquisitions, spin-offs, alliances and joint ventures.
• Investor Relations: Strategy for communicating with individuals who have inverted in the business.

2. Financial Risk: These are the risks associated with the financial structure and transactions of the particular industry.
3. Operational Risk: These are the risks associated with the operational and administrative procedures of the particular industry.
4. Compliance Risk (Legal Risk): These are risks associated with the need to comply with the rules and regulations of the government.
5. Other Risks: There would be different risks like natural disaster(floods) and others depend upon the nature and scale of the industry.