Future Business Leaders of America (FBLA) Entrepreneurship Practice Test

Which risk can be controlled or adequately prepared for?

1. Market Competition

2. Unexpected Development Costs

3. Changing Consumer Preferences

4. Economic Recession

The correct answer is: Unexpected Development Costs

The ability to control or adequately prepare for unexpected development costs stems from effective planning and risk management within a business. Companies can create budgets that account for potential overruns or unforeseen expenses during the development phase of products or services. By utilizing techniques such as thorough project management, contingency funding, and resource allocation, organizations can mitigate the impact of rising costs through foresight and strategic planning. In contrast, market competition, changing consumer preferences, and economic recessions tend to fall outside the direct control of a business. While a company can develop strategies to adapt to competitive pressures, identify shifts in consumer habits, or respond to economic downturns, these factors are influenced by broader market dynamics and external conditions. Thus, developing a proactive approach to unexpected development costs is a more controllable risk, allowing for preparation and management strategies that can help minimize their impact on the business.