No matter how viable a business is there are certain uncertainties that may occur the earlier an investor acknowledge this the better.
Life generally is a risk because you're not sure of what will happen next therefore you remain positive or negative on any of the outcome. The same life principles can be applied in business.
I realised many organisations and entrepreneurs tend to neglect key factors that could have impact on the growth of such businesses.
what's business risk?
These are factors that have the potential to stagnate the growth of the business or these are the uncertainties that has the potential to reduce the profit margin, performance, productivity of a business. I think deliberate attention must be given to this to avoid the collapse of such businesses.
Some causes of business risk.
There are so many causes of business risk but I will the few I have.
- Economic crisis. As far as I am concerned, this is one of the most important business risk which involves the change in the economic system of a nation. You may not be able to control the system because is determined by the leadership structure. For instance in Nigeria my country, the prices of things are uncontrollable. Some of the regulatory bodies has been scrambled which exposes the customers to an outrageous price.
- Natural Disasters is another cause of business risk. This can even affect online based businesses. Investor or entrepreneur aren't the controller of these natural Disasters like whirlwind, earthquake, etc. When this occurs it can tarnish or Minimize the gain of a particular business. It's important for an individual to prepare or have an allowance in the plan Incase of such occurrence in order to have a relative shock absorber.
- Humans can also be a cause. This can happen may be as a result of customer service,change in product, lack of communication etc. You can not be assured of a steady customer some may change along the way therefore customer retention policy should be put in place properly.
thanks for visiting my blog and all the comments appreciated.
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