Answer to Question #199991 in Management for Jarred

Question

Martin and Lorraine are Engineering graduates who have struggled to find employment post university. They have both decided to use their savings to start a business. They have decided to start a small fruit and veggie business in their area. Given that they live in a busy township, they are confident that their business will be a success as there is a market for it. Their biggest challenge however is their limited knowledge on business management and entrepreneurial skills and thus, requires you to play the advisory role for the business.

“They have both decided to use their savings to start a business”. Would you say Martin and Lorraine are taking a calculated risk? Justify your answer.

Answer 1

Yes, they are, because they live in a busy town, starting a business is a calculated risk. Their business has a chance to excel and even if it fails it is an entrepreneurial lesson. Some of the advantages they have are:

• They will have an income
• They will be their own boss
• Flexible hours
• Reward as an owner of a business