ENTREPRENEURSHIP

ACTIVITY 4.2

Submitted by: Shane Via B Caintic,

BTVTED FSM-2A-DEWEY
Submitted to: Mr. Jerson Teofilo, LPT
 1. Importance insurance in managing small business risk.

Credit insurance protects businesses from non-payment of commercial debt. It

covers your business-to-business accounts receivable. If you do not receive
what you are owed due to a buyer’s bankruptcy, insolvency or other issue, or if
payment is very late, a trade credit insurance policy will pay out a percentage
of the outstanding debt. This helps you protect your capital, maintain your
cash flow and secure your earnings while extending your competitive credit
terms and helping you access more attractive financing. Credit Insurance
enables businesses small or big to maximize their opportunities by allowing
them to provide credit to clients/customer without the risk of financial loss due
to the customer’s/client’s inability to pay due to insolvency. Credit insurances
serves as the back up of small businesses.

2. Possible risk of 3 small business.

 Availability of customers (sometimes the customer are many sometimes
few.)
 Unstable capital
 Availability of good stock in the market like chicken intestine (sometimes
our neighbor who has a snack house corner buys low quality of chicken
intestine which turns out not good when grilled.)
 The location is not good which does not attracts customer’s attention.
 There is competition happening (small business in our area tend to have
common goods/services which can also be the risk to some business
whose owner is not famous/rich).