3 ways to minimize business risk

Discussion in 'Entrepreneurship' started by lil sheggwen, Nov 11, 2016.

  1. lil sheggwen

    lil sheggwen Staff Member UF Member

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    every business owners/entrepreneur are risk taker,the survival and down fall of the business is beard solely by the business owner, and this risk can be so severe that it can bring about liquidation to such business,the risk can either be financial or operational.

    here are some simple and smart internal control ways to minimize the risk of your business.

    1. cash-flow management: the first business risk for most business is poor cash flow management by "scott lovingood". i have posted a lot about cash flow of a business,it determines the survival and downfall of a business,to reduce business risk you must be CASH CONSCIOUS "calculate your inflow-the total value of money received from sales,debtors,or other source and outflows-the total value of money payable to suppliers,creditor and so on. note: out of your excess always have some reserves to avoid cash flow crunches.

    2. business insurance: Insurance is a means of protection from financial loss. It is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss,(Wikipedia). insure your business against your specific risk,the risk associated with your business.
    many businesses insured against risk their business are not covered for, a manufacturing and processing company could sign an insurance policy that cover their equipment from been stolen and damaged,and its necessary to insure the workers working in the factory against injury."business owners policy" helps to cover damage to company assets that result from fire,storm and so on.

    3. develop a risk management plan: having insurance policy to reduce and protect against losses is just an aspect. risk management plan is something every business must manage right from startup throughout the lifetime of the business. risk management provide more than one worker for a task or on each work,so that in the absent of one the other can take charge,this is to avoid work breakdown.

    NOTE: your business can not eliminate all the business risk, you can only minimize their occurrence or reduce their impact.

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