“Business is a game of risk”. Whether it is a small or big business, the risk is its important part. Any business can earn profit only by undertaking risks only. The risk is related to factors such as market, finance, marketing, production, technology, business environment and factors such as social, legál; economic, political, technological. After identifying business risk, their intensive evaluation is done.

Risks which affect the business are: 

1. Economic Risks – 

These are the kinds of risks which directly affect the monetary aspect of the business. The main economic risks are as follows: 

• Risk related to the flow of money and capital market. 
• Risks related to the tax structure. 
• Risks related to privatisation and liberalisation. 
• Risk related to monetary policy. 
• Risks related to economic conditions and trends.

 Non – Economic Risk: 

Business is not merely an economic system, but it is also a social and human organisation. It is an important channel of creating and shaping cultural values, thinking styles, social beliefs, social trends, etc. A business has to work continuously in the economic, social and cultural environment of a country. Some non – economic risks are: 

• Risks related to physical features and climate. 
• Risks related to demographic changes. 
• Risks related to environmental balance. 
• Risks related to political instability. 
• Risks related to the socio-cultural environment.