P2 Describe how successful entrepreneurs manage risk

Good morning year 12

P2 requires you to explain how successful entrepreneurs manage risk.  You already know that 

the entrepreneur is the magic ingredient that combines the factors of production, these being 

CAPITAL, LAND & FACTORIES, PEOPLE and RAW MATERIALS. Such resources can only 

be used once so if you use them doing one thing you generally cant use them again for 

something else.

Entreprenuers take risks in the hope that they will in return make a significant profit. The risk is 

usually great and the ability to reduce it will allow for the best opportunity of succeess and 

further success in new initiatives and ideas.  

HOW TO MANAGE THE RISKS may sound quite complicated but if you break business down 

into the following  

* Financial control and great book-keeping

• Business planning – forecast v actual performance

• Recruit high calibre people – roles and responsibilities – job description and people spec.

• Aims and smart objectives click here

• Specificresponsibilities – maximise sales, minimise costs, 100% happy customers and staff

Plus great management accounts and book-keeping and maintaining high standards
  

I have attached the classroom resources above that illustrate your points.  P2 is due in on 

Wednesday 25th September 2013

Well done and good luck

Mr T