June 2009: Risky Business

Life is full of risk. But do you know what “risk” really means? And do you know how to protect yourself and your business from risk? You’re about to find out!

Think you have a great lemonade stand? You could win big!
Inc. magazine is holding their annual ‘Best Lemonade Stand in America’ contest.  Each week, they select a winner and post the story on their website.  This year, the grand prize winner will be featured in an upcoming episode of Biz Kid$! Follow this link for details:http://www.inc.com/lemonade/2009/
Fast Fact
What do you think is the riskiest sport for women? Read to the end for the surprising answer.
See clips from the show–on your computer
Our new Web site is live, with an enhanced blog, an archive of past newsletters, and lots more video. Follow this link and go to episode 207, “The World Is a Risky Place”: https://bizkids.com/show.aspx

What is risk?
A risk isn’t something that actually happens–it’s the chance that something will happen (also known as the probability). If you are riding a skateboard, there’s a risk that you will fall off and sprain your ankle. If you actually do fall off and sprain your ankle, it’s no longer a risk–it’s a reality.

Examples of risk for a business:
* An employee might do something illegal
* Someone could get hurt on the store’s property
* A customer could be injured by a product


What to do about risk?
No matter what you do, there is always some chance that something bad will happen. But you can make that chance as small as possible.


Be careful
If you ride a bike, you wear a helmet to reduce the risk of injury. Business risk is the same–think about the risks and do what you can to reduce them. A business that puts together bicycles could use a checklist of everything that needs to be tightened and tested before a bike is ready to sell.

Buy insurance
Insurance is a way for groups of people or businesses to pool their risk. Imagine our bicycle business again. They sell a faulty bicycle and someone is injured. The business could have to pay the medical bills, which could put them out of business. With insurance, the medical bills would be paid for by the insurance company.

Use contracts
Contracts are legal agreements among people or groups. Think about a business that sells music lessons. Perhaps they have several teachers under contract. If teachers can go solo and take students with them, the business will not survive long. The business should have a “non-compete” agreement that says that the student relationship belongs to the business, not the teacher. Contracts can be used in lots of ways. If you think you need contracts in your business, consult a lawyer. 

Risk and reward
Risk isn’t necessarily bad. Often, to reach bigger goals, you have to take bigger risks. Maybe you have to invest more of your money in your business. Maybe you have to try something you’ve never done before. The important thing is to look before you leap. Consider whether the risk is worth the possible reward. If it is, do what you can to minimize the risk. Even sitting and doing nothing has risk–the risk that you will become a couch potato!

Fast Fact Answer
What was your guess? Soccer? Football? Gymnastics? Nope–the riskiest sport for women is cheerleading, accounting for 65% of all severe injuries in high school athletics. Read this article to learn more: http://www.msnbc.msn.com/id/26293199/


Info to Go
* Is cheating worth the risk? http://www.cs.dartmouth.edu/farid/mathkids/risk.html
* Fun fish tank game about probability: http://www.bbc.co.uk/education/mathsfile/shockwave/games/fish.html

* Watch clips from the Biz Kid$ episode on risk: https://bizkids.com/show.aspx
Posted in Biz Kid$ News