The reward for entrepreneurship is profit and loss from risk-taking. Hence, a more significant part of any business involves risk. This page seeks to explain how to manage this risk effectively.
Why Risk Management?
Risk management informs a person’s decision-making process. It means the process of reducing the adverse effects a thing has on your business. The first process of risk management is conducting sound research on safe business practices. After completing a study, it is crucial to align it with the prevailing circumstances surrounding your business at the time.
There are four risk management plans:
Identify the Risk
This process involves asking the question “what if”. It prepares your mind for the potential risks you are seeking to prevent. For instance, you have probably caught yourself asking:
‘What happens if my goods get stolen’ OR ‘my computers, machinery or equipment breaks down?
Risks also cover employees getting injured while working, a sick supervisor or director, a natural disaster, or a fire outbreak.
These risks are easily identifiable. Also, identifying them is the first hope of managing it.