Finance, for me, is all about how to use money. To own a business, money issue always comes first, such as how much capital you need to invest, how much you can earn from it, how much you might loose...So we must take precautions to increase the rewards and decrease the risk.
By reading the book, it says that higher risks are associated with higher returns. For example, opening a small cookie shop obtains only little risk because the cost is low and there is not much unforeseen events, however, the profit might not be high, and earnings might be slow as well. Opening a high class restaurant, for instance, contains higher risk because of more cost and more things that need to be taken care of such as getting alcohol license or having nicer dining environment. The profit is definitely higher than opening a small cookie shop.
But, there is no guarantee which one makes more money than the other, having a good business plan is the key. This is why I am taking MBA program!
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