Final answer:
Small and medium-sized businesses face environmental, geopolitical, and societal risks that can impact their operations and profitability.
Step-by-step explanation:
Small and medium-sized businesses face potential threats when considering environmental risks, geopolitical risks, and societal risks.
Environmental risks: Small and medium-sized businesses may be affected by environmental risks such as climate change, natural disasters, and pollution. For example, extreme weather events can damage infrastructure and disrupt supply chains, while stricter environmental regulations can increase compliance costs.
Geopolitical risks: These risks include political instability, trade disputes, and changes in government policies. Small and medium-sized businesses that rely on international trade may face challenges such as tariffs, trade barriers, and political unrest that can affect their operations and profitability.
Societal risks: These risks arise from social factors such as changing consumer preferences, labor issues, and social activism. For instance, businesses that fail to address social and ethical concerns may face reputational damage and loss of customers.