I can’t seem to get most explanations from the internet and people seem to use the term in numerous ways.
Update: Ok I think I get it. People conflate the hazard and risk concept together. So when people discuss risks they are actually discussing probable hazards.
The reason this confused me is because entrepreneurs will ask about what risks there are in a project. When they just use it as a shorthand meaning what could go wrong that’s out of their control.
What also makes it confusing is that risk analysis calls the hazard column a risk column, then proceeds to add columns of impact and likelihood. When the risk should be the column that is a multiplication oh the impact and likelihood wrt the hazard.
In: 0
Risk is when there’s a chance of something bad happening.
If you invest some of your money in a stock, then you might earn money if the stock goes up in price (which is good), but you might lose money if the stock goes down in price (which is bad). So, there is risk in investing your money in stocks.
If you go on a picnic, the weather might be lovely and you’ll have a good time (which is good), or the weather might rain and ruin your picnic (which is bad). So, there is risk in going on a picnic.
If you drive to work in the morning, you might get to work on time without any incidents (which is good), or you might get into a car accident on the way (which is bad). So, there is risk in driving your car to work in the morning.
Some things are riskier than others, meaning the chance of something bad happening is quite high (like the stock price going down in the stocks example), or that the bad thing that could happen is very, very bad (like the car accident in the driving example). But since risky things can also lead to something good happening, we have to calculate and decide if doing a risky thing is worth the chance of the good thing happening versus the chance of the bad thing happening.
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