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What is a business risk?

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Anonymous

12y ago
Updated: 8/17/2019

investment in an entity with indicators that it is not able to return the investment

A business risk is a circumstance or factor that may have a negative impact on the operation or profitability of a given company. Sometimes referred to as company risk, a business risk can be the result of internal conditions, as well as some external factors that may be evident in the wider business community.

When it comes to outside factors that can create an element of business risk, one of the most predominant risks is that of a change in demand for the goods and services produced by the company. If the change is a positive one, and the demand for the offerings of the company increase, the amount of risk is decreased a great deal. However, if consumer demand for the offerings decreases, either due to loss of business to competitors or a change in general economic conditions, the amount of risk involved to investors will increase significantly. When a company's risk factor is considered to be increased due to outside factors that are beyond the control of the company to correct, chances of attracting new investors is severely limited.

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Wiki User

12y ago

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