AQA AS Business Unit 1Element 1- Starting a Business 1.

1 part 2- Risk and Reward

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Do all entrepreneurs

Queensbury/Hunton/Source- Folens & Nelson Thornes Sunday, 3 October 2010

NO!
Why not?

Queensbury/Hunton/Source- Folens & Nelson Thornes Sunday, 3 October 2010

Possible Reasons
Lack commitment No nance Not realistic Unable to problem solve

So how many new businesses fail in % terms?

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Risk and Reward

So this shows that there is a huge risk in setting up new businesses, but if you get it right there can be huge rewards

Queensbury/Hunton/Source- Folens & Nelson Thornes Sunday, 3 October 2010

Task
What might the potential risks be of becoming an entrepreneur?

Queensbury/Hunton/Source- Folens & Nelson Thornes Sunday, 3 October 2010

Feedback
Left well paid job Debts Loss of personal assets How long can you keep going?

Queensbury/Hunton/Source- Folens & Nelson Thornes Sunday, 3 October 2010

Decision Making
Entrepreneurs have to take some risks, but these should be calculated and focussed on1. 2. 3. 4. Is it worth it? Do we have to take this risk? Can we afford it? Can we manage the fallout?
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Approaches to Risk
Risk Risk Risk Risk avoidance reduction retention transfer

Queensbury/Hunton/Source- Folens & Nelson Thornes Sunday, 3 October 2010

Task
What rewards might there be for entrepreneurs?

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Feedback

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Getting the right balance

We must think about the impact of decisions as these impact on success or failure. Think about The Apprentice- who has got it right and therefore been rewarded and who has got it wrong as their risk did not pay off?

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Choices
The choices we make involve opportunity cost- what do you think this is?

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Opportunity Cost is
The cost of the next best alternative Think of some examples where this occurs. What are the impacts of these choices?

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Possible Implications
How best should we use scarce resources? What will give the highest benets?

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Reading
Business Review Chasing Shadows- Opportunity Cost

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Task Easy jet vs. BMI

What are the similarities and differences between the 2? How do they both price their seats? What is the opportunity cost of this?

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