Question

The seasonal change happens to be natural
type business risk.​

Answer 1

Answer:

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Nature of Business Risk

Business risk is the possibilities a company will have lower than anticipated profits or experience a loss rather than taking a profit. Business risk is influenced by numerous factors, including sales volume, per-unit price, input costs, competition, and the overall economic climate and government regulations.

Business risk

(Source: fortune)

1. Arises due to Uncertainties

Uncertainties mean when you are not sure of what is going to happen in future. Common examples of uncertainties are: change in demand, government policy, technology etc. Business risk is due to these uncertainties.

Browse more Topics under Nature And Purpose Of Business

Objectives of Business

Classification of Business Activities

Concept and Characteristics of Business

Comparison of Business, Profession and Employment

2. Essential part of any Business

A risk is an important characteristic of business. No business can avoid risk although the degree of risk may vary Risk can be reduced but cannot be eliminated.

3. Degree of Risk Depends upon the Nature and Size of Business

The degree of risk depends upon the type of business; for example, a business involved in fashion items bears more risk as compared to the business involved in standardized goods. Similarly, a business operating at large scale bears more risk as compared to small-scale business houses.

4. Profit is the Reward for bearing the Risk:

The business earns a profit because they are bearing risk.”No risk no gain” larger the risk more is the profit. An entrepreneur bears risk with the expectations of earning a profit.

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