Uncertainty and Risks

One of the main feature of business is uncertainity

The ultimate success of business depends upon the customers who are willing to use their purchasing power to meet their needs, and competitive and alternating suppliers available in the market. Most of these factors are outside business organization and more directed by situational factors. This situation is further complicated by the fact that the supplier has to keep his products and serviceability ready to offer when an opportunity arises. It necessarily means that he has to act in anticipation of sales. It involves risk taking since he is not sure whether his goods will be sold or services will be accepted. Take the small business of a cobbler. He keeps his instruments ready along with leather pieces so that any time a customer walks in for shoe repair he gets a ready service. He invests in space, time, equipment and skills first and then he can expect to get some business. All these decisions which he has taken to invest may prove a risk and he may not get any return.

Business is done with uncertainties and risks. Technological change such as use of canvass shoes instead of leather ones, may not give him the same scope to repair, and with this change his business may shrink. He can only forecast business but is never assured of its outcom