Raising Entrepreneurial Capital

taken here is that risk management is an integral part of effective financial

management. By controlling unexpected costs through a prudent risk man-

agement strategy, the firm will increase its chance of survival and increase its

value for the owners.

DEFINING RISK AND RISK MANAGEMENT

Risk is a word that is used in many ways in the field of risk management.

Our definition is a simple one: Risk is the possibility of loss. What is requir ed

for risk to exist? There must be a situation involving multiple possible

outcomes, and at least one of the possible outcomes must be negative. For

most persons, risk is an intuitive concept. If you have resources