Giving reasons, explain the expected financial risk and business risk in- start-up, growing, mature and declining...

Giving reasons, explain the expected financial risk and business risk in- start-up, growing, mature and declining businesses.

Expert Solution

A business will have to face several risks during the different stages.

In start-up stage, the major risky component is that of getting the financial resources to run the business. The money needs to be arranged either by bank loans or venture capitalists etc. The other risk is that of acceptance of the company's product in fhe market.

In the growth stage, the company will generally have good income from sales in the form of revenue. The company may plan to expand its business and issue shares to raise capital. The business risk is that the company will start having competitors who will try to capture the market.

In the maturity stage, the company is at the risk of losing the market. It has financial resources which have to be invested in the research and development of the company and its products. It is at the risk of leaving the market.

In declining company, the market of the company is lost and the financial resources are also reduced.

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