business risk is a future possibility that may
prevent you from achieving a business goal.
TYPES OF RISK FOR SMALL BUSINESS
1. Competitive Risk
The risk that your competition will
gain advantages over you that prevent you from
reaching your goals.
2. Economic Risk
The possibility that conditions in the economy
will costs or reduce your sales.
3. Operational Risk
The potential of failures related to the day-to-day
operations of an organization such as a customer
service process.
4. Legal Risk
The chance that new regulations will disrupt your
business
5. Compliance Risk
The chance that you will break laws or regulations.
6. Strategy Risk
The risks associated with a particular strategy.
7. Reputational Risk
Reputational risk is the chance of losses due to a
declining reputation as a result of practices or
incidents
8. Program Risk
The risks associated with a particular business
program or portfolio of projects.
9. Project Risk
The risks associated with a project.
10. Innovation Risk
Risk that applies to innovative areas of your
business such as product research.
11. Country Risk
Exposure to the conditions in the countries in
which you operate such as political events and
the economy.
12. Quality Risk
The potential that you will fail to meet your quality
goals for your products, services and business
practices.
13. Credit Risk
The risk that those who owe you money to fail to
pay.
14. Exchange Rate Risk
The risk that volatility in foreign exchange rates will
impact the value of business transactions and
assets.
15. Interest Rate Risk
The risk that changes to interest rates will disrupt
your business. For example, interest rates may
increase your cost of capital thus impacting your
business model and profitability.
16. Taxation Risk
The potential for new tax laws or interpretations to
result in higher than expected taxation.
17. Process Risk
The business risks associated with a particular
process.
18. Resource Risk
The chance that you will fail to meet business goals
due to a lack of resources
19. Political Risk
The potential for political events and outcomes to
impede your business.
20. Seasonal Risk
A business with revenue that's concentrated in a
single season such as a ski resort.
Avoid the risk - change your business process,
equipment or material to achieve a similar
outcome but with less risk.
Reduce the risk - if a risk can’t be avoided reduce
its likelihood and consequence. This could include
staff training, documenting procedures and
policies, complying with legislation, maintaining
equipment, practicing emergency procedures,
keeping records safely secured and contingency
planning.
Transfer the risk - transfer some or all of the risk to
another party through contracting, insurance,
partnerships or joint ventures.
Accept the risk – this may be your only option.
Financial risks include those events that can
weaken business earnings or cash flow, and affect
shareholder wealth, because investors may value a
company by discounting a company’s projected
cash flows.
Operational risks relate to a company's internal
activities and include process risk and innovation
risk
Strategic risk relates to a company's operating
environment, its business activities and the
company's communications with investors.
1. Develop a risk culture
2. Determine the organisation’s risk appetite
3. Identify the risks
4. Perform a risk assessment
5. Respond to risk
6. Monitor risk
7. Report risk
TYPES OF INSURANCE
1. Professional liability insurance.
2. Property insurance.
3. Workers’ compensation insurance.
4. Home-based businesses.
5. Product liability insurance.
6. Vehicle insurance.
7. Business interruption insurance.