The following facts relate to Sporty Pty Ltd:

1. Sporty operates fitness centres across Australia.

2. The company is owned by the five directors who have financed the purchase of shares by taking out personal loans, which are secured on their homes.

3. The directors aim to expand the business and then float the company on the ASX.

4. The strategy involves charging lower prices than their competitors in order to attract new members.

5. The directors are expanding by buying out small independent fitness clubs.

6. The purchase and refurbishment of the new clubs is financed by bank loans.

The managing director wants to maintain good corporate governance and business practices and therefore would like to carry out a review of business risks but does not know anything about it.

Required Explain the benefits of carrying out a business risk assessment and describe the steps involved in risk management. In your comments, give examples of specific business risks faced by Sporty Pty Ltd.