Is the higher the risk;the higher gain justifiable in business?

[Mataracy]

In the a business world of today people normally say that;the higher the risk taking the higher the returns or gain.But sometime if the care is not taken the revers will be the case.

It is therefore advisable that every company should have risk manager that is more experienced and intelligent.

Though the risk appetite of some individual or company is very low may be they are panic may be loss of resources may occur(remember that risk is under probability of win or loss).

In other word; a company needed to accept some risk in order to make profit. A company may take risk if its management decides that the rusk of loss is justified by the expectation of a gain.

Before taking any risk,the risk must be first identified. The risk must be rank in order of significant (order of priority). The management should know may be the company needed yo take that risk urgently.
The company should make sure that the risk must not affected the shareholder or the customers; employee,creditors,communities and general public government and business partners.
The risk should also be measured that is; quantify may be it can be manage through setting target for maximum or high risk tolerance and measuring actual performance against the target.

Is the higher the risk the higher the gain justifiable?

 

[Good luck]

Do they say but not in all ramifications.In some cases it differ.Business like forex trading,you make more money with high capital which means you are at a risk of losing a large sum of money if the exchange rate fall and the market dwindled.We also have it like that in some other businesses.One needs to take a risk to be successful in virtually every business one engaged in.

 

[Chibson]

one thing that is very important in business is to have the proper knowledge and understanding of how to run it. if you have the knowledge and understanding of how business works then you will know that every business requires risk but your ability to manage the risk and achieve maximum result is what is very important. people who have the knowledge actually know how to manage risks when it comes to finance and other areas.

 

[sincerem]

It is justifiable that way, but that doesn't mean we should go taking risks after risk without learning how we'll earn through it. The higher the risk based on how legitimate the investment its, the better the profit. That centres to, the higher the invested funds, the better the profit that will come in when it is successful. Those who doesn't take risk can't earn the benefits that follows it.

 

[Lens1000]

It's justifiable when you make profit but it isn't justifiable when you recorded a huge loss. A business with a high risk isn't a good business, most especially when you are just starting out. The only advantage in such business is when you make a huge gain but if you managed to record a loss it could be very fatal

 

[btaliat]

The higher the money you stake in a business, the huher your return should be under normal circumstances. But just like a commentator advice, we should not allow greediness to make us stake higher especially when we are doing the business for the first time. This is to prevent loss.

 

[Josemendez]

Well, risks are virtually part of every investment one wants to go into and this doesn't in any way mean that things will be more risky if we aim for higher rewards. It boils down to risk management ability. If one is able to manage risk through careful observation and strict adherence to laid down strategies , he won't feel the weight of the risk whether big or small.

 

[Bookwormlux]

It is an unjustifiable saying that we should not trust at all. When the risk it high for some one, it obviously mean that the person is lacking in proper knowledge on how best to go about the business and they should rather focus on learning what they are lacking in than to believe that the high odds mean there is a possibility of making higher profits.

 

[Augusta]

Why not if the risk will yield high profit then I wouldn't mind. I know in life everything we need to gain comes with a good amount of risk so risk taking is imminent. But what one needs is a calculative risk if it will bring with it high profit then I will be all for it.

 

[Sherman198]

I think it's a little vindictive to say that.....but we just have to be very careful how we are taking those risks. You should take a reasonable risk. You can't say because you wanted to take risks inorder to earn a better gain then you decided to invest all your money in your business without having anything to fall back on.

 

[Alexandoy]

I really don't know and I cannot say if that is correct - the more risk, the more gain. Maybe it is just a saying because there are businesses that can make you rich but the risk is not much. Take the case of a shoe store. The products can last a long time. The risk is small but the profit is good enough. That was the business of the richest man in our country.

 

[Setho]

I do not think that this is a justifiable saying at all. Whenever you want to invest in a business what matters most is how what it is the risk. So many more other metrics will reveal to you if the business is worth investing or not and not just only the amount or the margin you are willing to risk.