2.  Understand the principle of taking a
calculated risk
 Understand that weighing up the risks and
the rewards of a new business idea is an
important part of the process of judging the
outcome and viability of a start-up
 To see mistakes as part of the process of
learning to succeed

3.  Risking it all : Opening a restaurant
‘The Modern Pantry’

4.  In small groups
 Think of all of the risks associated with
starting up a small business
 Why are they risks?
 What are the rewards of such risks?
 Are they worth taking?

5.  We will watch 15 minutes of Dragon’s Den
 After each pitch; we will discuss what risks
the Dragons may have been considering
 Watch: here

6. Risks Rewards
Is there a big enough gap Become wealthy
in the market?
Selling the
business once it
Have you got enough is established
capital?
If the
Getting the right people risks Get excitement
working for you work, the
The buzz of
business risks paying off
is motivates many
Will I secure enough
customers from other
successful people
rivals?
Have control
Does the product say Many people
what it says it does? dislike being
told what to do.
Is it really what
customers want?

10. Voice technology
YES
Look to upgrade the
phone’s ability?
YES
Update the phone
design?
NO
Invest enough
money to
upgrade the
iPhone?
YES
Create a new image
NO
Invest money in
advertising?
NO
Lose competitive edge

11.  Risks are not always risky – Bloomsbury
risked £2500 on the Harry Potter book, which
is not a lot of money for a business, and now
generates yearly profits of £20 million
 Big firms calculate that 1 in 5 products is
successful
 They therefore release lots of new products backed
by expensive advertising.
 A flopped product may cost them £10 million
 A successful product can makes them £100 million.
 Four flopped products costs £40million, one
successful product is £100 million
 Therefore the risk is worthwhile.

12. To produce
another film
sequel in the
Harry Potter
series

13. Risks Rewards
Is there a big enough gap Become wealthy
in the market?
Selling the
business once it
Have you got enough is established
capital?
If the
Getting the right people risks Get excitement
working for you work, the
The buzz of
business risks paying off
is motivates many
Will I secure enough
customers from other
successful people
rivals?
Have control
Does the product say Many people
what it says it does? dislike being
told what to do.
Is it really what
customers want?

14.  Microsoft are thinking of marketing a laptop
which is completely run on voice commands
and touch screen
 Meaning no keyboard and no mouse.
 Calculate the risks of this product for the
company.

15.  Market Gap
 Capital
 Getting the right people to work for you?
 Getting customers from rivals?
 Does the product do what it should?
 Is it what customers want?

16. Voice
activated, touc
h screen
computer

17.  A new business starts out with few, if any, customers
and is likely to face __________ from existing firms.
To succeed it needs to plan its launch carefully and work
out how to create a competitive ________ over its
rivals. To gain this advantage, it needs to offer a product
which customers prefer to a rival's product.
 Setting up a business involves ____ and ______. Profit
is the reward for risk-taking. Losses are the ______ of
business failure.
 An owner may decide to close a business if losses are
being made, or if the level of ______ is not enough to
make trading risks or hours worked worthwhile.
Competition advantage risks reward penalty profit

18.  UK Red bull wesbite: here
 Answer Q: 1,2,3

19.  Worksheet GCSE A-Z Calculated Risk: here