Business risks and techniques to manage them 29/11/2021
Greetings to everyone in steem Cameroon hope everyone is doing great. Today, i will be sharing among us the different risk involve in a business and and techniques to manage them, I was thought in school yesterday so I thought it wise to share it amongst my friends on steemit.
The different types of risk mostly face by people are,
- business risk: this are risk that are mostly associated with an organization's particular market or industry
- market risk: this are risk that are associated with changes in market conditions such as, fluctuations in prices, interest rate and exchange rate.
- credit risk:this are risk that associated with the potential for not receiving payment payment owed by debtors. In this case people buy product on credit and are not able to refund the money or not being able to refund money at the appropriate time.
- operational risk: this are risk associated with internal system failures because of mechanical problems eg machine manufacturing,human errors, poor allocation of resources.
5)legal risk: this are those risk associated with the possibility of other parties not been able to meet contractual obligations.
Below are the management techniques of risk.
1)Risk advoidance:this include not performing activities that could carry risk eg not buying a property inorder not to take on the legal liability that comes with it.
2)Risk reduction: this include reducing the severity of the loss or the likelihood of the from the occuring.
3)Risk sharing:this means sharing with another party the burden of loss or benefits.
4)Risk retention: involves accepting the loss or benefits of gain, from a risk when occurs. True self insurance falls fall in this category. risk retention is a viable strategy for small risk where the cost of insuring against the risk would be greater over time than the total losses sustained.
Thanks for reading, hope you learn something from it