Corporate risk management is one of the critical concerns of managers when they make investment allocation decisions among multiple projects. Risk is an essential aspect of good entrepreneurship. If you want people to invest in you, you need to have a plan that involves taking a step of faith based on a strong idea you've had. The idea must also minimize potential consequences for failures, however, and be a "low-risk risk."

Success in business often comes down to recognizing and managing possible risks associated with potential opportunities and returns. The types of risks faced in most businesses are quite varied and far ranging. Risks typically include both financial and physical categories.

Types of risk include sometimes apparent hazards, such as safety and health risks associated with operations, as well as financial risks from exposures to market price volatility, counter party credit defaults, and legal liabilities. Some risks are intuitively obvious; unfortunately, many are not.