Chapter 5: Managing Risk

When I think of a stable company who handles risk well its Microsoft, there one of the best diversified companies I know of who have split up into 4 quadrants relatively equally. 1. Personal Computers / 2. Video Games / 3. Software / 4. App acquisition's (Linkdin/Github). And is commonly knows as one of the most stable companies in the US.

For this fifth chapter I learnt a variety of things regarding entrepreneurial risks, management through ethics, why, transparency/code of ethics, and also business planning. 

As an entrepreneur risk is inherent with the job and there is no way to go around it, so your next best option is to find ways to diminish that risk. This can only be done through things you have control over, so one of the first ways is by having business ethics, which starts with using universally known and agreed upon morals such as integrity, hard work, and support for your team. This can be helpful by setting the precedent of accountability in your job, therefore avoiding risky behavior, and from personal experiences lies are a rabbit hole that ever since the beginning have already sunk you. Not only that but being able to trust one another not only creates a positive environment but also one where you can rely on one another to support you during the tough and good times. And at last the big reason regarding the actual business is building trust with those you rely on such as the consumer, suppliers, and team, in order to not only maintain your business but also grow. But how do you actually create trust with all of these groups? Creating a code of ethics is a key part to communicating what you stand for not only to your team but to suppliers and consumers. Transparency is key to actually demonstrating your code of ethics in practice, by being open about finances regarding employees retirement, and also the health of the company. 

Another big component of this chapter was creating a business plan, but why? Well there's multiple reasons, as a startup the main few reasons are more than likely to communicate with investors why they should invest in you and your business, and also to show them how you will accomplish the plan. But once your startup is established or you're a huge company, you will probably utilize the plan to keep track of the business timeline and also make sure the goals and character or company remains. Its importance and use varies depending on the company's seniority. But it's a key component to creating anything that will remain strong, growing, and be of value. 

My reflection after reading chapter 5, is that risks are always there and will never leave when you're an entrepreneur. But your very job is not only creating a product and selling it but assessing the risks that you might face and diminishing them. And while I knew that ethics were part of business, I always thought of ethics as something exclusive of risks, but after reading this chapter I realized how important it is in managing risk. I think similar to what I learned from the last chapter, which was doing good means doing good. And I think I see this in my daily life and understanding how to apply it to more than my personal life but to everything I do will be an important component for my ventures success.