However, ability to live with risk is very much a personal issue. Some business owners can live with more risk than others and some can manage risk better than others.

Having ability to effectively manage risk is imperative for a successful business venture. Therefore business owners need to be able to effectively judge how much risk is "acceptable" and which business ventures are inherently "too risky" and therefore perhaps harmful to business overall.

While all businesses must grow and change continually in order to survive, every time a business makes a decision to expand or increase its offerings, a modicum of risk does exist. Most businesses face risks when they incorporate new offerings into their current ones, take on new employees, when they change their marketing techniques sufficiently, or when they expand into new areas of business above and beyond general core or "parent" business.

Each time a new project, venture or offering is added to a business, "risk containment" should be employed. It is never possible to eliminate all risks completely, but containing risks to an acceptable level will enhance experience and keep overall losses at an acceptable level, if failure of new venture or offering does occur.

Business owners need to assess risk using following principles:

1. Is this risk necessary for further development of business? If so, why?

2. Is this risk attainable for business? If so, why?

3. Is this risk affordable for business? If not, then it shouldn't be done. A strict, realistic assessment of funds available and a budget should be worked out before a business embarks on any type of expansion or addition to its present offerings.

4. Is "timing" right for new addition or venture? Many times, if a business is experiencing a downward cycle or other financially stressful barriers, expansions or additions are best left for another period in life of a business.