Business operations are exposed to different types of risks because of uncertainty. Successful business management must ensure proper safeguard and cover against such potential risks. Some risks may be small and hamper the business operations for some time. Other risks may be very big and may destroy the company or change its course forever. Typically, a company may face several types of risks. With the increasing complexity in the business world and globalization, the types and severity of risks keeps changing.
Some of the potential risks to a business are:
- Physical damage due to any natural or man-made calamity
- Loss of key people
- Employee fraud
- Economy fluctuations (rate changes, market crashes etc.)
- Financial risks (bad debts, loss of material, sudden tax or penal liabilities etc.)
- Technology changes
- Legal risks (Some liability arising out of lawsuits, infringements, violations etc.)
- Risks arising out of business communication
- Financial risk
A company must prepare and implement a comprehensive framework to identify, assess, monitor, mitigate and reduce the impact of various risks which may threaten it.
For each type of risk, a suitable approach must be adopted to minimize the risk. Periodically, this must be reviewed and corrective actions must be taken.
Some of the approaches are detailed here.
(Expert advice to GROW your business wherever you are, whenever you want.
SMEBusinessGuide.com… https://goo.gl/E3pfoQ)
WHAT YOU CAN READ NEXT
NEXT POST:
Insurance
