Types of Business Risks??

Re: Types of Business Risks??

Hello Friends

1) Internal Risks are those risks which arise from the events taking place within the business enterprise.
The various internal factors giving rise to such risks are:-
o Human factors:- They may result from strikes and lock-outs by trade unions; negligence and dishonesty of an employee; accidents or deaths in the industry;incompetence of the manager or other important people in the organisation,etc.
o Technological factors:- They may result in technological obsolescence and other business risks.
o Physical factors:- They include the failure of machinery and equipment used in business;fire or theft in the industry; damages in transit of goods, etc.

2) External risks are those risks which arise due to the events occurring outside the business organisation. Such events are generally beyond the control of an entrepreneur.
The various external factors which may give rise to such risks are :-
o Economic factors:- They result from the changes in the prevailing market conditions.They may be in the form of changes in demand for the product, price fluctuations, changes in tastes and preferences of the consumers and changes in income, output or trade cycles.
o Natural factors:- are the unforeseen natural calamities over which an entrepreneur has very little or no control.They result from events like earthquake, flood, famine, cyclone, lightening, tornado,etc.
o Political factors:- have an important influence on the functioning of a business, both in the long and short term.

Re: Types of Business Risks??

* strategic, for example a competitor coming on to the market
* compliance, for example responding to the introduction of new health and safety legislation
* financial, for example non-payment by a customer or increased interest charges on a business loan
* operational, for example the breakdown or theft of key equipment

Have a nice day

Re: Types of Business Risks??

Thanks for your post,

It definitely give insight into possible risk area's,
I do think that one of the most obvious risks when thinking
about 'Enterpreneurship' is Financial Risk.

For example when you have a Shop where you buy an amount of products to put
in stock to be able to sell them to customers, not knowing when they will come to buy the products.
Having the (financial) risk that it may take a while when you have your Return on Investment.
Being at risk that it might take a while to get your investment back, or at risk of getting
less back than expected or at risk at having no return on investment at all.

On my Home Business Lifestyle Blog I write about a very special kind of Business that you
can set up easily without having to invest a lot of money upfront and without even having to
buy any products upfront. You don't even have to take care of - or invest in - customer service.
It's Affiliate Marketing, selling other peoples products (you only have to bring them to an online
shop and you get commissions.)

All the Best,
To your Happy - Small Business - Inspiration,
HP

Re: Types of Business Risks??

The types of risk your business faces

The main categories of risk to consider are:

* strategic, for example a competitor coming on to the market
* compliance, for example responding to the introduction of new health and safety legislation
* financial, for example non-payment by a customer or increased interest charges on a business loan
* operational, for example the breakdown or theft of key equipment

These categories are not rigid and some parts of your business may fall into more than one category. The risks attached to data protection, for example, could be considered when reviewing both your operations and your business' compliance.

Other risks include:

* environmental risks, including natural disasters
* employee risk management, such as maintaining sufficient staff numbers and cover, employee safety and up-to-date skills
* political and economic instability in any foreign markets you export goods to
* health and safety risks

Re: Types of Business Risks??

Hi

Strategic Risk
Strategic risk is the broadest category of risk your business will face. Strategic risks are future oriented, according to The Institute of Risk Management (IRM), and can arise when a new competitor enters your industry, when two businesses merge to create an industry powerhouse, or when you face decisions about creating new products or entering new markets.

Operational Risk
Operational risks are also broad, but they are short term in nature, impacting the activities your business undertakes on a daily basis. The Office of the Comptroller of the Currency (OCC) defines operational risk as "the risk of loss resulting from failed processes, people and systems, or from external events." Essentially, operational risk is the possibility that transactions or processes will fail due to poor design, inadequately trained personnel or external business disruptions such as a fire. It also covers the risk of fraud and the possibility that your business will fail to meet a contractual obligation due to operational reasons.

Thanks

Re: Types of Business Risks??

Hi
Strategic Risk
# Strategic risk is the broadest category of risk your business will face. Strategic risks are future oriented, according to The Institute of Risk Management (IRM), and can arise when a new competitor enters your industry, when two businesses merge to create an industry powerhouse, or when you face decisions about creating new products or entering new markets.

Your business will also face strategic risks when it considers operational matters, such as how far away from your main center of operations to locate a disaster recovery site. If you choose a site too close to your existing operations, both sites could go down in the event of a major disaster such as an earthquake or hurricane, allowing your competitors to gain market share while your business is disabled. If you choose a site farther away, the expense of communications and travel may be prohibitive.
Operational Risk
# Operational risks are also broad, but they are short term in nature, impacting the activities your business undertakes on a daily basis. The Office of the Comptroller of the Currency (OCC) defines operational risk as "the risk of loss resulting from failed processes, people and systems, or from external events." Essentially, operational risk is the possibility that transactions or processes will fail due to poor design, inadequately trained personnel or external business disruptions such as a fire. It also covers the risk of fraud and the possibility that your business will fail to meet a contractual obligation due to operational reasons.
Financial Risk
# Financial risk is the possibility that a business will not have adequate liquidity to meet its ongoing obligations, and this has both short- and long-term implications. Financial obligations include debt repayment, payroll requirements, dividend payments, government licenses and taxes. Obligations can also include more complex transactions, such as the ability to settle financial transactions in the capital or debt markets. Financial risk encompasses the possibility that external sources of finance, such as debt or the ability to access the capital markets, may not be available when needed. This lack of availability could be due to poor credit ratings or operations in remote locations that are too risky for financial institutions to fund.

Thanks

Re: Types of Business Risks??

Systematic Risk - Systematic risk influences a large number of assets. A significant political event, for example, could affect several of the assets in your portfolio. It is virtually impossible to protect yourself against this type of risk.

Unsystematic Risk - Unsystematic risk is sometimes referred to as "specific risk". This kind of risk affects a very small number of assets. An example is news that affects a specific stock such as a sudden strike by employees. Diversification is the only way to protect yourself from unsystematic risk. (We will discuss diversification later in this tutorial).

Re: Types of Business Risks??

Hello,

Investment Risk #1: Business Risk

Investment Risk #2: Valuation Risk

Investment Risk #3: Force of Sale Risk

Thank you

Re: Types of Business Risks??

Hello,

There is no question that a huge business selling goods over the internet is obviously going to be taking in a lot of money, and therefore they will have plenty of card details and customer details in their possession. But that doesn't mean that smaller businesses aren't equally - or perhaps more - at risk than they are.

Let's consider this for a moment. The biggest sites know that their success rests partly on how secure their business is. If they cannot protect the information of their much valued customers then their business is not going to be a very stable one - because if the worst happened they could quite easily end up losing everything.

Thank You
Amy

Re: Types of Business Risks??

If we take about business the first thing that come to our mind is what are the ricks that we are going to face in that. Be sure there are risks in every business. risk without out business is waste of time if we face all the risks only have interest in working and to get profit its really very amazing feeling after we get the profit facing many problems. There are different types of risks in business some of them are price risk,diversification risk, pure risk and credit risks. face all these and get success in that..... Stock Picks

Re: Types of Business Risks??

Business risks are of a diverse nature and arise due to innumerable factors, there are mainly two types of risk can be arise in your business, internal as well as external, well internal Risks are those risks which arise from the events taking place within the business enterprise. Such risks arise during the ordinary course of a business. External risks are those risks which arise due to the events occurring outside the business organization.

Re: Types of Business Risks??

External risks are those risks which arise due to the events occurring outside the business organisation. Such events are generally beyond the control of an entrepreneur.