Danger or loss caused in business by any events that re unpredictable in future is called business risks. Generally all are business moves are uncertain. Business is subject to wide variety of risks. Internal business risks are those which arise from events within the business enterprise. Fire, breakdown machinery, negligence or dishonesty of employees, strike by the workers of the firm are examples of internal risks. External risks involve those losses which result from forces outside the particular business undertaking. Changes in market conditions, technological changes political changes, natural calamities, social disturbances etc are example of external risks. Management has little control over external risks. Particular risks arise from the faults of specific individuals and they affect only a few persons. Such risks are the responsibility that cause or suffer them. Action to reduce the frequency of risk may be taken by an individual business enterprise or by several competing firms. The management of an individual firm can take steps for loss prevention and control. Efficient planning and effective control help to reduce business risks.
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