The possibility of an event or condition occurring that will have a negative or harmful impact (eg cause damage, injury or loss) on something perceived to be of value. Risks associated with investment decisions concern the chance the hoped for or expected outcome is not achieved. It exists where the exact outcome of a particular action or event is unknown, but the possible outcomes and their individual likelihood of occurrence are known. When making decisions about investment a business will have to accept a certain degree of risk, ie the chance that their expected or ‘hoped for’ outcome is not achieved. This is because whilst expenditure is incurred today, the benefit expected to be enjoyed from the investment occurs sometime in the future, yet the future is uncertain. In the context of start-ups risk mainly concerns the fact that time, effort and money is invested into an idea for which there is no guarantee of success. Even if the concept has been tried and tested there are numerous factors outside the control of the business that can impinge upon its success. There are ways in which the risk of failure and personal losses in the event of failure can be reduced. For example: undertaking initial (and on-going) market research ; drawing up a detailed business plan; keeping investment in fixed assets to a minimum, for example, by renting and leasing as opposed to purchasing land and buildings or vehicles and equipment outright; setting up the business as a limited company; taking out insurance eg buildings and contents, public liability, professional indemnity, to insure against the risk of things such as fire and theft, personal injury, and errors and omissions (in the case of advisory / consultancy services); ensuring adequate training and supervision of any labour employed – so that business activities comply with legislation and, of course, meet customer expectations. Although the risks associated with setting up and running a business can be minimised, they cannot entirely be eliminated. This is because there are numerous factors over which the business has little or no control (eg political, economic, social, technological and competitive), which cannot always be foreseen, and which can seriously impinge upon its success. Thus, despite the best market research available, some products unexpectedly fail. This is something appreciated by entrepreneurs. They are, however, prepared to take that risk, in return for the potential financial and other rewards associated with starting and running a business.