1. Taking A Calculated Risk
Unit 11

2. Calculated Risk...
Is about putting a numeric value or probability on the risk of the new business or product.
For example – what is the risk of a child getting burned from a baking a cake?
If the child is 2 years old then the risk is high, lets say 50/50 (50%), however if the cooker is in a separate room and the child is supervised then the risk is almost 0

3. Objectives Understand the principles of taking a calculated risk,
Understand that weighing up the risks and the rewards of a new business idea is an important part of the process of deciding if it is a viable option,
Appreciate that seeing mistakes is a part of the process of learning to succeed.

4. Key Words.
Calculated risk – the probability of a negative/positive event happening.
Downside – the disadvantage of a course of action.
Upside – the advantage of a course of action.

5. Risks and Rewards of a new Business

6. Upsides Upsides are what can go right in business.
Potential for gain in a business, situation, or transaction.

7. Downsides What can go wrong in a business
Potential for loss in a business, situation, or transaction.

8. Making Mistakes People in Business make mistakes.
The worst thing that can happen is that the mistake is big and the business has to close down,
Smaller mistakes may lead to a loss of profit or,
The business not being a successful as it could be.
The important thing is to learn from the mistakes, not make them over and over again!!

9. Closing a Business What happens when a business closes down?
Task, find out what happens when a business closes down?
Can you produce a guide to closing a business?

10. Recap
Overtou risk taking