1. Business Risk
Marketing Co-op

2. You will be able to…. Identify the 3 types of business risk
Explain how risk affects business decisions
Identify ways that businesses can protect themselves from risk

3. Business Risk Risk if the uncertainty of an outcome
Three types of risk for businesses:
Economic
Natural
Human

4. Economic Risks
The risk that an endeavor will be economically unsustainable
Can include:
Changes in demographics
Business cycle
Competition
Government regulations

5. Natural Risks
Probability of harm to human health, property or the environment posed by any aspect of the physical world other than human activity
Can include:
Perishability
Weather
Fires

6. Human Risks
Risks related to the actions of those inside and outside the company
Can include:
Employee theft or incompetence
Accidents
Shoplifting
Fraud
Computer-related crime

7. Impact on Profits Economic: Loss of potential consumers
Product/Service popularity may end quicker than expected
Competition may increase and you could lose customers
Increased regulations could prevent certain business practices or production
Natural:
Loss of goods = loss of profits
Damage of goods/resources
Human:
Loss of goods/resources
Injuries
Lawsuits
Loss of information

8. How Can Businesses Protect Themselves?
Risk Management
The identification, assessment, and prioritization of risks followed by minimizing and controlling the probability of unfortunate events

9. How Can Businesses Protect Themselves?
Against Economic Risks:
Conducting constant research to stay ahead of the curve
Staying up to date with regulations
Against Natural Risks:
Can be more difficult that others
Implementing safety measures (sprinklers, fire extinguishers)
Against Human Risks:
Conducting background searches on employees
Implementing security measures (cameras, internet security)
Providing safety training for employees

10. Review What are the types of business risks?
What are examples of each?
How can companies prevent each type of risk?

11. Business Risk Assignment
Complete Business Risk worksheet
Complete Business Risk Case Study assignment
3. Present case study findings next class.