Download Risk

Quiz

 What does IRS do and stand for?
 The _________promotes small business development, helps
businesses secure government contracts and provide assistance.
 Sydney is in the process of starting a new business what does
she need, what does she need to decide? How would she
finance her business, who would help? What organizations are
out their to help entrepreneurs start a business? Name a local
organization that could assist with starting a new business?
 This agency provides businesses with information regarding
employer responsibilities in relation to unemployment
insurance. Who am I?
Milemarker 6

 Questions to reflect on:
 How are you going to test your business idea?
 What do you have to do to prepare to get the idea
out in the marketplace?
 What problems did you encounter in testing your
idea?
 Are there things you would do differently if you had
to do it again?
Key Terms 1
 1. Advertising-A non promotional message paid for
by an identified sponsor utilizing media such as
television, radio magazines billboards and direct
mail.
 Financial plan-provides projected financial
statements
 Loss-More money going out than coming in
 Net Profit-amount of money that remains when
expenses are paid
Key Terms continued 2
 Personal Selling-a form of promotion that uses planned
personalized communication in order to influence
customer buying decisions and ensure satisfaction

 Promotion- Any form of communication a business or
organization uses to inform, persuade or remind
consumers about its product/service
 Public Relations-Any activity designed to create a
favorable image towards a business its products or its
policies
o Visual Merchandising/display-cordination of the
physical elements of a business or a product to project
the desired image to the consumer
Key Terms continued 3

 Vender –supplier of goods or services to a business
4.04 Understand the
Marketplace Experience
Key to understanding the marketplace
experience, is identifying risk and knowing
how to manage and minimize your exposure
to risk.
Definition of Risk

Risk: The possibility
of a financial loss.
Risk Management

Risk Management: The process of
managing a business’s exposure to
risk in order to achieve business
objectives.
Business Risk

Business risk: The
possibility of
business failure or
loss.
SpeculativeRisk
Speculative risk: 
Risking loss to make
a profit.
•Possibilities of loss,
no change, or gain
(Examples: buying new
machinery, constructing
new buildings)
Risk

Pure risk: The possibility of
loss to a business without any
possibility of gain.
Economic risks
Natural risks
Human risks
Economic risks: Risks that result
from changes in overall business
conditions.

•Competition
•Changing consumer
lifestyles
•Population changes
•Limited usefulness of
products
•Inflation
•Product
obsolescence
•Government
regulation
•Recession
Natural risks: Risks resulting from
natural causes.

•Floods
•Earthquakes
•Tornadoes
•Hurricanes
•Fires
•Lightening
•Droughts
•Unexpected changes
in normal weather
conditions
Human risks: Risks caused by
human errors as well as the
unpredictability of customers,
employees, or the work
environment.

•Shoplifting
•Employee theft
•Burglary
•Robbery
•Computer crime
•Stolen credit cards and
bad checks
•Accidents and injury
Methods of Risk
Management

Methods
Methods of
dealing with
business risk
Risk reduction
Risk transfer
Risk retention
Emergency planning
Think Pair Share

 Reflect back on the progress of your product or service?
 At this stage in the operation, what needs to be reevaluated or
changed?
 By getting involved in producing products or services caused
you to see entrepreneurship differently explain your answer.
 How successful or regretful are you in choosing the product or
service.
 Throughout this progress what has your personal experience or
knowledge have you gained from the “Road of
Entrepreneurship?”
Risk reduction
•Design work areas to reduce the chance
of accident or fire.

•Educate employees on safe use of
equipment.
•Check and service safety equipment on
a regular basis.
•Stress the limits of your company’s
products.
•Implement ways to reduce shoplifting.
•Control employee theft.
•Implement ways to reduce robbery.
Risk transfer
•Property insurance: Covers

the loss of physical property
(cash, inventory, vehicles, buildings).
•Real property: Buildings, land, and fixtures.
•Personal property: Vehicles, clothing,
furniture, jewelry.
•Business interruption insurance: Makes up
for lost income if a business is shut down for
repairs or rebuilding.
Group Activity Bell ringer
11-16-2015

 What Methods do Entrepreneurs Use to Control Risk
 Read as a Group & Complete the Case Study at the
bottom of handout.
Risk transfer Casualty Insurance
•Casualty insurance: Protects a
business from lawsuits.

•Errors-and-omissions insurance: Protects
businesses from lawsuits resulting from
mistakes in advertising.
•Product liability insurance: Protects
manufacturers from claims for injuries that
result from using their products.
•Fidelity bonds: Protect companies from
employee theft.
•Performance bonds: Protect a business if
work is not finished on time or as agreed.
Risk Transfer Life Insurance

•Life insurance: Pays a business
in the event of the insured
person’s death.
Risk Transfer Workers’
Compensation

•Workers’ Compensation: A
government-regulated program
that provides medical benefits
and income to employees who
are injured on the job.
Risk retention

•Self-insurance against
business loss
•The business must set
aside money each
month to help cover
the costs should a
loss occur.
Emergency planning

•Businesses must have procedures
in place before a crisis occurs.
•Businesses must create
emergency response plans to
handle emergency
situations.
What is Promotion in marketing mix?

 Promotion is one of the four main components of
this mix, and it is essential to complete the sales
process
 Communication
 The promotion component of the marketing mix is
all about communication with the customer. If a business cannot
effectively communicate its message to the public,
it will not close sales
Advertising (Sprint)

 Kick the Beat - Sprint Family Plan TV Ad
Commercial
 Target
 Target Black Friday 2-Day Sale Commercial
Advertising

 Nike Basketball Commercial 2013 - "Just Do It"
Advertising Continued

One of the most essential components of promotion is
advertising. Most businesses use some type of advertising to
bring in new customers. This is a direct form of communication
in which a business has to pay for the right to gain access to
consumers. Advertising can take place in a number of different
ways such as radio ads, TV ads, newspaper ads and online
advertisement.
Public Relations

Public Relations
•Public relations is another essential part of the
promotion mix. Public relations deals with the
overall general perception of the company. This
can come through using news releases, news
stories and other strategies to shape the
perception of the company. Maintaining a good
reputation in the public eye is important for most
businesses, and this area of promotion deals with
handling publicity. This could be done with the
help of a public relations firm or handled
internally.