There are many types of business risks that can create a huge threat to your success as an entrepreneur. However, if you take the time to think through the possible threats to your business, you will have a better understanding of how to deal with them in the best way possible. Business risks can come in many different forms, both external and internal so it is important to know where and how your business could be at greater risk of being hurt. This article is going to explore the four main business risk groups, what they are, and how you can protect your business against them.
External risks are the ones that come from things like natural disasters, vandalism, or terrorist attacks. For this type of risk management you may want to consult an attorney who has experience in commercial law, such as commercial construction, intellectual property law, and engineering. They can help you determine the best course of action for your business based on the specific risks that exist, as well as what may happen if you do not take the right actions to mitigate those risks.
Internal risks come from software or hardware failures, staffing problems, employee theft, and more. When an internal threat is discovered, the first step is to identify the problem and resolve it. The next step is to implement a risk assessment to determine the best course of action to solve the problem. Finally, business continuity plans are put in place to ensure that an attack does not destroy the entire company. To do this you will need to implement a risk assessment, develop a plan, train people appropriately to use the new software or hardware, and monitor everything constantly to make sure it is working properly.
All business activities should be closely monitored to detect any signs of danger. If an audit is performed on your organization then that audit will uncover business risks every business faces. Every audit should include random audits of cash drawers, credit cards, and important accounts such as payroll. Additionally, all employees should undergo a background or criminal record check to make certain that they have no record of crime.
Natural disasters pose unique risks to businesses. Natural disasters include earthquakes, floods, tornadoes, hurricanes, and more. While there is no way to prevent a disaster from happening, you can alleviate the risk of it happening by preparing in advance, designing a hazard plan, and monitoring it. A good example of a disaster plan is a building inventory. Every business may face a need to rebuild or purchase land. A good example of a hazard plan is the design of a flood-control system.
Business risks can cause financial losses or even damage to the physical structure of your building. These include risks associated with purchasing raw materials, supplies, machinery, or electricity. Some businesses may face the risk of theft of their raw materials if they fail to properly safeguard them. Additionally, inclement weather conditions may face a business with employees who are unable to safely operate heavy machinery or if they are unable to deliver the raw materials to the plant.