Business Risk Business risk refers to the probability of losses or inadequate profits due to uncertainties or unexpected events, which are beyond control.
Nature of Business Risk
- Business risk arises due to uncertainties
- Risk is an essential part of every business
- Degree of risk depends upon the nature and size of business
- Profit is the reward for bearing the risk
- Natural Causes The natural causes are such type of uncertain factors that human being cannot make any preparation against.
- Human Causes Human Causes are related to a chance of loss due to human beings or employees of the organisation.
- Economic Causes Economic Causes are related to a chance of loss due to change in market condition.
- Other Causes These are unforeseen events like political disturbances, mechanical failures such as the bursting the boiler.