RISK AND RISK MANAGEMENT IN ENTREPRENEURSHIP.pptx

RISK AND RISK MANAGEMENT IN ENTREPRENEURSHIP.pptx

1. RISK AND RISK MANAGEMENT IN ENTREPRENEURSHIP BY UHIARA CATHERINE CHINYENE 21/MSC/12050

2. INTRODUCTION Risk taking in entrepreneurship refers to the willingness and ability of entrepreneurs to make decisions and take actions that involve uncertainty, potential loss, and the possibility of failure. It is an inherent part of the entrepreneurial journey, as business owners navigate through uncharted territories, innovate, and strive for growth. Risk taking in entrepreneurship involves analyzing potential risks, assessing their potential impact, and taking calculated risks that offer a favorable risk-reward ratio - After-all, most potential opportunities have an element of risk when they're pursued.

3. OBJECTIVES To discus types of Risk in Entrepreneurship To explain advantages of risk taking To discus risk Management To explain risk Management Techniques and strategies To discus effective risk management

4. Types of Risk in Entrepreneurship Financial Risk. Financial risk is a common type of risk faced by entrepreneurs. Market Risk. Market risk relates to the uncertainties associated with the demand for a product or service in the market. Operational Risk. Operational risk pertains to challenges and uncertainties encountered in day-to-day business operations.

5. Advantages of Risk Taking New opportunities. opens up the possibility for new opportunities. Valuable experiences. provides invaluable experience for entrepreneurs Increased innovation. Risk-taking encourages innovation by inspiring individuals to think outside the box and explore possibilities

6. Risk Management Risk management is the process of monitoring and dealing with the financial risks associated with investing. Risk management essentially occurs when an investor or fund manager analyzes and attempts to quantify the potential for losses in an investment, such as a moral hazard, and then takes the appropriate action (or inaction) to meet their objectives and risk tolerance.

7. Risk Management Techniques and strategies Avoidance: The most obvious way to manage your risk is by avoiding it completely . Retention: This strategy involves accepting any risks that come your way and acknowledging that they come with the territory Sharing: This technique comes with two or more parties taking on an agreed-upon portion of the risk. Transferring: Risks can be passed on from one party to another.

8. Effective risk management Assess the suitability of the mitigation methods.  Authorize the decision to take on the risk.  Monitor performance over time. 

9. Conclusion Risk is an important part of the financial world. The word often brings up feelings of negativity since there is the potential for capital and investment loss. But risk isn't always bad because investments that have more risk often come with the biggest rewards. Knowing what the risks are, how to identify them, and employing suitable risk management techniques can help mitigate losses while you reap the rewards.