What is a risk assessment and provide an example relevant to entrepreneurship?

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Risk assessment is a structured process to spot what could go wrong for a venture and decide which risks to address first. In entrepreneurship, you identify potential events that could disrupt operations or goals, evaluate how likely each event is and how big an impact it would have, and then prioritize them so you can plan mitigations for the most significant threats. The example of a supplier failure affecting inventory shows this clearly: you recognize the risk, judge both its probability and the potential disruption to your supply, and then decide on actions such as diversifying suppliers or building buffer stock. This differs from merely assigning probabilities to past events (descriptive data), forecasting market growth (market potential analysis), or calculating break-even (cost-volume-profit analysis), all of which serve other purposes.