4 taking calculated risks

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  • 1. Understand the principle of taking acalculated risk Understand that weighing up the risks andthe rewards of a new business idea is animportant part of the process of judging theoutcome and viability of a start-up To see mistakes as part of the process oflearning to succeed

2. Risking it all : Opening a restaurantThe Modern Pantry 3. In small groups Think of all of the risks associated with starting up a small business Why are they risks? What are the rewards of such risks? Are they worth taking? 4. Wewill watch 15 minutes of Dragons Den After each pitch; we will discuss what risksthe Dragons may have been considering Watch: here 5. RisksRewardsIs there a big enough gap Become wealthyin the market?Selling thebusiness once itHave you got enough is establishedcapital?If theGetting the right people risksGet excitementworking for you work, theThe buzz of business risks paying off is motivates manyWill I secure enoughcustomers from othersuccessfulpeoplerivals?Have controlDoes the product sayMany peoplewhat it says it does? dislike beingtold what to do.Is it really whatcustomers want? 6. Voice technologyYESLook to upgrade thephones ability?YESUpdate the phonedesign? NOInvest enoughmoney to upgrade the iPhone?YES Create a new image NO Invest money in advertising?NOLose competitive edge 7. Risks are not always risky Bloomsburyrisked 2500 on the Harry Potter book, whichis not a lot of money for a business, and nowgenerates yearly profits of 20 million Big firms calculate that 1 in 5 products issuccessful They therefore release lots of new products backedby expensive advertising. A flopped product may cost them 10 million A successful product can makes them 100 million. Four flopped products costs 40million, onesuccessful product is 100 million Therefore the risk is worthwhile. 8. To produceanother filmsequel in theHarry Potterseries 9. RisksRewardsIs there a big enough gap Become wealthyin the market?Selling thebusiness once itHave you got enough is establishedcapital?If theGetting the right people risksGet excitementworking for you work, theThe buzz of business risks paying off is motivates manyWill I secure enoughcustomers from othersuccessfulpeoplerivals?Have controlDoes the product sayMany peoplewhat it says it does? dislike beingtold what to do.Is it really whatcustomers want? 10. Microsoft are thinking of marketing a laptopwhich is completely run on voice commandsand touch screen Meaning no keyboard and no mouse. Calculate the risks of this product for the company. 11. MarketGap Capital Gettingthe right people to work for you? Getting customers from rivals? Does the product do what it should? Is it what customers want? 12. Voiceactivated, touch screen computer 13. A new business starts out with few, if any, customersand is likely to face __________ from existing firms.To succeed it needs to plan its launch carefully and workout how to create a competitive ________ over itsrivals. To gain this advantage, it needs to offer a productwhich customers prefer to a rivals product. Setting up a business involves ____ and ______. Profitis the reward for risk-taking. Losses are the ______ ofbusiness failure. An owner may decide to close a business if losses arebeing made, or if the level of ______ is not enough tomake trading risks or hours worked worthwhile.Competition advantage risks reward penalty profit 14. UK Red bull wesbite: here Answer Q: 1,2,3 15. Worksheet GCSE A-Z Calculated Risk: here

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