 Bismillah ar-Rahman ar-Rahim ladies and gentlemen, very warm welcome to lesson 8. Now we are moving towards the very important part which is entrepreneurial risk and profit. Now there is a great debate between the risk and the profit or to find out the combination or to find out the relation and the appropriate word is correlation between the risk and profit. Now why I am not using the word relation is there a relationship between the risk and the profit because risk may not be necessary that you will have a profit, you will need a profit, risk may not be necessary that you will not need a profit, but in that it is confirmed that you definitely have unpredictable or unforecasted questions related to risk. After this happiness, there is risk mitigation in the finance, so how can the risk factor be minimized? How can we marginalizing the risk? How can we get benefit out of risk? How can we get the bigger benefit from the risk? Risk is an opportunity. Do you understand that every error is an opportunity? One more thing. A person will make a mistake. Mistake is an error. Every error is an opportunity. Every opportunity is an innovation. Every innovation gives you another way of life, way of business, another universe, another working space, another working space to be having another idea. And where does every idea come from? From people. But success is the same. Those who are the idea of gut feeling. Let me tell you something important here. Have you always avoided this psychology? We never touch ourselves. Have you ever touched your soul? Have you ever touched your heart? Have you ever touched your body? Have you ever touched the inside you? What comes out of you? Do you want to achieve something big? For example, you just see that there are comparisons. There are a lot of comparisons in the world. Somebody has a big house. Somebody has a big car. Somebody has a pool. Somebody has three or four houses. Somebody has a hill station. Somebody has something, something, something. Everybody is in competition. Is it the competition? This competition is entrepreneurship. Are we getting the risk for those? This is business. You are going to replicate something. If you want to enact something, then you are reacting and enacting. You are making a mistake. Are you in competition? If there is competition, that means you are not touching yourself. Now you will say that if there is no profit, then what is profit? Is profit competition? Yes, of course. Profit is competition. If it earns 10 lakhs in a year, then it is earning 11 lakhs and this is competition. You have a bigger profit chunk than other firms or a company or an individual. Now, what is risk? Risk has no competition. Risk has a different philosophy. Risk mitigation in the finance is for the finance people, for the structured people, for the company sake, for the company reason. You cut all the expenses. You will reach the ratio. Equalize the balance sheet. They are the mature structural people. This is not risk. Risk mitigation, you are just managing finance as per the law. Now, let me prolong this a little bit. When you touch yourself, if you think that I want to go for a hiking, I want to go for a walk, I want to go for this, I need to breathe. I need to breathe much. I need to breathe air. I need to breathe life. Who am I? So, you open a new window of innovation, and then you get into something. So, when you go towards new things, then it is not your risk. You go towards a new innovation. You come out of this competition. This competition is a bloody, or you can call it, this is a complete red ocean strategy or, I mean, net to net throttle competition. So, if I stay in competition, then imagine, for example, a horse with a race. It is dressed as blinders that it will run its own race. Seeing the race of others, its focus will move as it moves, either it will fall, or it will speed up, or it may not be possible to chase it forward. So, you must have to have, first, when entrepreneurs talk about risk, they must have to focus with their brain, their own brain. Their thoughts must be their thought, their own thoughts. Their ideas must be their own ideas, their ideas, and their implication must be their own implication, their implications. Now, move on. What we are going to learn about this chapter is to understand the relationship between the entrepreneur risk and the profit. The risk is a situation that would cause smaller profit than expected. Or a situation that may result with the loss of companies, financial or material resources. And then is to the risk meaning facing with the market change, new competitors, and technological changes. Now, we understand that the camera was big, obsolete, small, we took care of it, we are making videos, we are editing, but the idea slowly began to be backlashed. Now, its price has reduced to cover a marriage which was made in the camera and it was made in 15,000 rupees. Now, keep the idea that classics will be always classic. Remember this. Classics will never end. Whether they were classic clothes or they were classic coat or classic glasses, they will remain relevant because they are classic. Now, we take that forward because how will they remain classics. Now, let's see what are its types. Majorly what we saw here is that the change of market is considered to be a risk. Then the change of upcoming competitors, many other brands of one brand, then your competition or market divide or market share divide or your profit share. Where I gave an example, in 2008 I gave an example of packages they were making a tissue with their rough and that was not their main job. 80% were taking market share. In 2012 the demand for market went down to 50% Then they understood that more competitors came and only one was reproducing the waste again so that they could burn it but that became their main business. Now what happened? Many more came in the market. So here you have to look on to your supply chain, you have to look on your waste, production, you have to look on your upgradation or you have to look on for upcoming developing technologies. So entrepreneurship could be faced with a different type of risk including one is we will do this slowly but you will do this slowly the one is pure risk. Then we will talk about the speculative risk then we will talk about the fundamental which is called sometime but we call it unavoidable risk financial risk then is a carrier risk then is a family and social risk then is a psychic risk Many times I go to a psychic prison I will say my rigidity So this is how we will discuss in the next module So far these are the types of risk type of risk Thank you