Business Makers

Business risk refers to the uncertainty of profit or even the possibility f loss due stop unexpected events in future. There is a chance of loss form the day goods are produced in anticipation of demand until they are sold and the payment is received. Risk is inseparable form business and cannot be eliminated. But risks can be reduced and the loss arising form risk can be spread.

The main characteristics of business risks are as under: (i) Uncertainty about the future course of events (ii) Risk is inherent in the nature of business enterprise (iii) Profit is the reward for bearing risk (iv) The degree of risk varies form business to business.

Business risks arise due to the following cause: (i) Natural causes like flood, famine, earthquake, etc. (ii) Economic causes like change market conditions (iii) Human causes such as strikes, lockout, accidents, and others (iv) Political causes such as civil war, fall of Government, and others (v) Physical causes such as mechanical defects.