Business Risks are threat to a company’s ability to achieve its goals. Businesses today can be unpredictable as anything can happen. Business Risks can cause the company to encounter events that will make the company’s initial plan flop.
Business Risks can be cauaye by an internal factor (factors within the company’s power to control) or external (factors that the company cannot easily control: Natural disasters, government policies).
Management of business Risks:
1. Make a business plan
Before the execution of any form of business, the first thing every business owner should do is to make a business plan. This enables the company to know it’s strengths, weakness, opportunity and threats as well as competitors because these factors can add to the risks company’s go through in business.
2. Evaluate risk factors
Business Risks are almost inevitable in a business, so evaluating a the company’s internal and external factors will be a good step to knowing what to expect in a business.
Look out for possible risks that similar Companies have experienced while workers will be trained to handle risk.
The ability to evaluate risk factors will actually help in reducing the amount of risks in a business. If a company can check the weather forecast for the day and know if it is favourable for delivery or other activities it wishes to carry out, such Company tends to become more productive.
3. Write a risk management plan
A risk management plan would help a company prioritize its risk opportunity.
It looks into risks that may occur, likely to occur or is most likely to occur .
These risk levels enables the company to be prepared incase of impending danger.
4. Buy insurance
Having your company insured is one thing a company should you not overlook. It helps reduce the cost of a new purchase in case of an accident.
5. Limitation of making sells on credit
This factor is for financial risks. The number of people who buy on credit should be reduced because they may lead the company into bankruptcy. Their impact may not even be felt until the company’s finances goes down
