1. 4.04 Understand the Marketplace Experience
Risk
Key to understanding the marketplace experience, is identifying risk and knowing how to manage and minimize your exposure
to risk.
Bellinger: Quiz Code: TE7SY3XU
: Reflections: Milemarker 6/Key terms (place in your notebook)
Teacher Input: Taking Risk ppt
Students Input: Taking Risk notes
Group: Food Truck Project

2. Milemarker 6 Bellringer
Questions to reflect on:
How are you going to test your business idea?
What do you have to do to prepare to get the idea out in the marketplace?
What problems did you encounter in testing your idea?
Are there things you would do differently if you had to do it again?

3. Key Terms
1. Advertising-A non promotional message paid for by an identified sponsor utilizing media such as television, radio magazines billboards and direct mail.
Financial plan-provides projected financial statements
Loss-More money going out than coming in
Net Profit-amount of money that remains when expenses are paid
Opportunity cost-When resources are limited, the option that is given when a consumer chooses one product or service over another

4. continued
Personal Selling-a form of promotion that uses planned personalized communication in order to influence customer buying decisions and ensure satisfaction
Promotion- Any form of communication a business or organization uses to inform, persuade or remind consumers about its product/service
Public Relations-Any activity designed to create a favorable image towards a business its products or its policies
Visual Merchandising/display-cordination of the physical elements of a business or a product to project the desired image to the consumer

5. continued
Vender –supplier of goods or services to a business

6. *Risk: The possibility of a financial loss.

7. Risk Management: The process of managing a business’s exposure to risk in order to achieve business objectives.

8. Business risk: The possibility of business failure or loss.

9. Think About It The possibility of financial loss is: Risk Marketing
Entrepreneurship
Collateral

10. Speculative risk: Risking loss to make a profit.
Possibilities of loss, no change, or gain
(Examples: buying new machinery, constructing new buildings)

11. Pure risk: The possibility of loss to a business without any possibility of gain.
Economic risks
Natural risks
Human risks
Stopped on
 inancial analysis Print
Meaning and definition of economic risk
Generally speaking, economic risk can be described as the likelihood that an investment will be affected by macroeconomic conditions such as government regulation, exchange rates, or political stability, most commonly one in a foreign country. In other words, while financing a project, the risk that the output of the project will not produce adequate revenues for covering operating costs and repaying the debt obligations.
Economic risk is, however, a nebulous term with various definitions. In a nutshell, economic risk refers to the risk that a venture will be economically unsustainable, due to various reasons vitiating from an alteration in economic trends to fraudulent activities which ruin a project’s outcome. Before starting with the projects, it is important to consider economic risk for determining the likelihood of potential risks being outweighed by the benefits.
Example of economic risk
The economic risk can be looked upon in a variety of ways, with a wide range of modeling systems. In a simple example, let us presume a planned housing development. In this case, the economic risk is that the gains from the development will not cover the development costs, leaving the developer in debt. This can take place due to downturns in the real estate market, lack of interest in the housing, unexpected cost overruns, and various other factors.
Why economic risk matters
Economic risk is one of the reasons for international investing carrying higher risk as compared to domestic investing. Bondholders and shareholders generally put up with the risk undertaken by international companies. Investors dealing in sale and purchase foreign government bonds are also exposed.
Moreover, economic risk can also provide additional opportunities for investors. For example, foreign bonds allow investors to involve themselves circuitously in the foreign exchange markets as well as the interest rate environments of various countries. However, the foreign regulatory authorities can impose different requirements on the sizes, types, timing, credit quality, disclosures of bonds, and underwriting of bonds issued in their countries.
Economic risk can be, however, reduced by opting for international mutual funds for they proffer instantaneous diversification, time and again investing in various countries, currencies, instruments, or international industries. 

12. *Economic risks: Risks that result from changes in overall business conditions.
Product obsolescence
Government regulation
Recession
Competition
Changing consumer lifestyles
Population changes
Limited usefulness of products
Inflation

13. *Natural risks: Risks resulting from natural causes.
Unexpected changes in normal weather conditions
Floods
Earthquakes
Tornadoes
Hurricanes
Fires
Lightening
Droughts

14. Human risks: Risks caused by human errors as well as the unpredictability of customers, employees, or the work environment.
Shoplifting
Employee theft
Burglary
Robbery
Computer crime
Stolen credit cards and bad checks
Accidents and injury

15. Think About It?
A seafood restaurant on the Outer Banks suffered damage during a hurricane and had to close for 3 months to make repairs. What type of risk does this demonstrate?
Human Risk
Economic Risk
Natural Risk
Risk Transfer

16. Methods of Risk Management

17. Methods of dealing with business risk
Risk reduction
Risk transfer
Risk retention
Emergency planning

18. Think Pair Share
Reflect back on the progress of your product or service?
At this stage in the operation, what needs to be reevaluated or changed?
By getting involved in producing products or services cause you to see entrepreneurship differently explain your answer.
How successful or regretful are you in choosing the product or service.
Throughout this progress what has your personal experience or knowledge have you gained from the “Road of Entrepreneurship?”

19. Risk reduction
Design work areas to reduce the chance of accident or fire.
Educate employees on safe use of equipment.
Check and service safety equipment on a regular basis.
Stress the limits of your company’s products.
Implement ways to reduce shoplifting.
Control employee theft.
Implement ways to reduce robbery.

20. Risk transfer*
Property insurance: Covers the loss of physical property (cash, inventory, vehicles, buildings).
Real property: Buildings, land, and fixtures.
Personal property: Vehicles, clothing, furniture, jewelry.
Business interruption insurance: Makes up for lost income if a business is shut down for repairs or rebuilding. For example: Cape Fear Chicken & Barbeque

21. 4.04 Understand the Marketplace Experience
Risk
Key to understanding the marketplace experience, is identifying risk and knowing how to manage and minimize your exposure to risk.
Bellringer: On the Job, Key Termsp.57/Overtime Pay Try it p.60/knowledge Check p
What methods do Entrepreneurs use to control Risk? (group)
Teacher Input: Finish Risk ppt
Student Input: Notes
Group: “Food Truck Project”/Business Plan, Truck Design/Menu
Complete Workplan for Your Signature Dish

22. Group Activity Bell ringer
What Methods do Entrepreneurs Use to Control Risk
Read as a Group & Complete the Case Study at the bottom of handout.

23. *Risk transfer Casualty insurance: Protects a business from lawsuits.
Errors-and-omissions insurance: Protects businesses from lawsuits resulting from mistakes in advertising.
Product liability insurance: Protects manufacturers from claims for injuries that result from using their products. Ex. McDonald’s Hot Coffee Incident)
Fidelity bonds: Protect companies from employee theft.
Performance bonds: Protect a business if work is not finished on time or as agreed.

24. Risk transfer
Life insurance: Pays a business in the event of the insured person’s death.

25. Risk transfer
Workers’ Compensation: A government-regulated program that provides medical benefits and income to employees who are injured on the job.

26. Think About It
Trey was able to use his property insurance to replace his catering company's delivery truck that was stolen. What does this demonstrate?
a. Risk Transfer
b. Risk Control
c. Risk Retention
d. Risk Avoidance Ri

27. Risk retention Self-insurance against business loss
The business must set aside money each month to help cover the costs should a loss occur.

28. Emergency planning
Businesses must have procedures in place before a crisis occurs.
Businesses must create emergency response plans to handle emergency situations.

29. 4.04 Understand the Marketplace Experience
Risk
Key to understanding the marketplace experience, is identifying risk and knowing how to manage and minimize your exposure
to risk.
Bellinger: (Loss prevention Checklist Podcast) (17 mins)
Take notes from podcast, include a definition of Loss prevention? Include how often a Loss prevention checklist should be re-evaluated? (Turn In)
Group: 4.04 Pracitce Quiz (use quizlet, powerpoints/notes)
Group: Food Truck Project/workplan

30. “Food Truck Project”
Group

32. What is Promotion in marketing mix?
Promotion is one of the four main components of this mix, and it is essential to complete the sales process
Communication
The promotion component of the marketing mix is
all about communication with the customer. If a business cannot
effectively communicate its message to the public,
it will not close sales

33. Advertising (Sprint) https://www.youtube.com/watch?v=s34u-c4ykzY
Target
Stop here

34. Advertising Kia https://www.youtube.com/watch?v=ZYWHsOeDf3Moul

35. Advertising
One of the most essential components of promotion is advertising. Most businesses use some type of advertising to bring in new customers. This is a direct form of communication in which a business has to pay for the right to gain access to consumers. Advertising can take place in a number of different ways such as radio ads, TV ads, newspaper ads and online advertisement.

36. Public Relations
Public relations is another essential part of the promotion mix. Public relations deals with the overall general perception of the company. This can come through using news releases, news stories and other strategies to shape the perception of the company. Maintaining a good reputation in the public eye is important for most businesses, and this area of promotion deals with handling publicity. This could be done with the help of a public relations firm or handled internally.