6 Types of Business Risk

[Suba]

Every business will certainly encounter risks that were not previously suspected or the emergence of unexpected events. Risks can occur because of wrong management or strategies and the business systems they run.

The Importance of Knowing Business Risks
Business people, especially for those who are about to start running a business, would be better off if they studied the business mechanism first, so that business people are expected to be able to minimize business risks or avoid bigger risks.

Even though every business will have different risks, and require different actions, at least business people know the following 6 business risks:

1. Inherent Risk
This risk will be inherent in a business, for example if you do a food business, goods will be damaged due to incorrect storage, also the risk of expiration.

2. Strategic Risk
Each strategy will have a different level of risk, especially in a marketing strategy that must consider costs and benefits.

3. Operational Risk
To minimize operational risks, businesses can make Company Operational Standards, it is also necessary to assign employees according to their expertise.

4. Financial Risk
Financial risks can occur in errors in recording financial data, budgets and cash flow, setting fund allocations.

5. Legal Risk
Legal risks can occur because companies violate government regulations, or there are demands from other parties.

6. Technology Risks
Technological risks often occur due to negligence in maintaining machines and other equipment that will hamper the production process.

 

[Yusra3]

There are six broad categories of business risk.

1. Economic risk: The likelihood that a company will experience a negative financial impact from a change in price or market demand.

2. Operational risk: The likelihood that an adverse event will occur at your company, leading to losses and damage to your operations.

3. Legal risk: The possibility that you may be sued for damages by someone who feels harmed by your activities or conduct.

4. Customer-related risks: The possibility of losing customers due to poor customer service, poor product quality, or other factors related to the relationship between you and your customers.

5. Product-related risks: The possibility that the product you develop may fail to meet its intended purpose, causing financial losses and/or harm to your reputation or brand identity as a result of negative media coverage or customer dissatisfaction with the product itself (or both).

6. Operational risk: The likelihood that an unfavorable event will occur at your company (including natural disasters such as floods and fires), leading in turn to losses and damage to operations (such as loss of lives).