Classification of Individual Business Risk
Individual business risk can be low or high impact and low or high likelihood. Here are some illustrations for a satirical magazine.
What can management do about risks once they are identified? Obviously what to do based on the risk and there are an infinite variety of risks. One possible categorization of potential reactions by management is as follows:
In the end, the business of the entrepreneur is risk raking and all risk cannot be removed. The fundamental economic truism is that there is a correlation among risk and return and high returns are not possible with any risk.