In Insurance we look at the Risk (Subject of Insurance) then determine what our exposure is. There are areas where you have a huge exposure in one season and very low exposure in another season, you just have to roll the dice and see what weighs more.

There are areas where you know that during a certain season you will lose a lot of money, Oklahoma has a huge potential for loss in the Hurricane season yet Insurance Companies still go in and insure the properties. Why, I would suspect that during the non hurricane season they actually make money, its a calculated risk

That is the same in every business, determine your exposure through the seasons the make your assumptions based on solid information. There is no business out there that has no risk, there is no line of business that I have heard that is 100% guaranteed to be a success. You have to know that they will be down periods but the question to ask is how much of a loss will you make in the down season and how much of a profit in the up seasons then determine what has more weight.

Failure to determine your exposure provides a potential for failure of your business in the immediate future. There is nothing wrong with being exposed to bad elements in your business but there is something wrong in not being able to plan for the bad and acting as if there is no exposure to hard and tough challenges.

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