![]() If a risk is rated ten this means it is of major importance to the company. Each risk is rated on a scale of one to ten. You can plot on a risk map the significance and likelihood of the risk occurring. There are some tools you can use to help evaluate risks. In some cases, the cost of mitigating a potential risk may be so high that doing nothing makes more business sense. These can then be compared to your business plan - to determine which risks may affect your objectives - and evaluated in the light of legal requirements, costs and investor concerns. Many businesses find that assessing consequence and probability as high, medium or low is adequate for their needs. This can be done by considering the consequence and probability of each risk. To evaluate risks, it is worthwhile ranking these risks once you have identified them. Risk evaluation allows you to determine the significance of risks to the business and decide to accept the specific risk or take action to prevent or minimise it. A secure IT system employing encryption will safeguard commercial and customer information. If hackers break into your IT systems, they could steal valuable data and even money from your bank account which at best would be embarrassing and at worst could put you out of business. ![]() IT risk and data protection are increasingly important to business. For example, if you are heavily reliant on one supplier for a key component you should consider what could happen if that supplier went out of business and source other suppliers to help you minimise the risk. You should examine these operations in turn, prioritise the risks and make provisions for such a risk happening. If your business is too dependent on a single customer and they are unable to pay you, this could have serious implications for your business' viability. ![]() Identifying financial risk involves examining your daily financial operations, especially cash flow. Financial and operational risksįinancial risks are associated with the financial structure of your business, the transactions your business makes and the financial systems you already have in place. For example, concerns about the increase in obesity may prompt tougher food labelling regulations, which may push up costs or reduce the appeal of certain types of food. You should ask yourself whether the products or services you offer could be made less marketable by legislation or taxation – as has happened with tobacco and asbestos products. You may also want to consider legislative risks to your business. You may need to consider whether employment or health and safety legislation could add to your overheads or force changes in your established ways of working. They also apply to the need to act in a manner which investors and customers expect, for example, by ensuring proper corporate governance. Where there's a strong possibility of this happening, you should prepare some sort of response.Ĭompliance risks are those associated with the need to comply with laws and regulations. whether the US company would lower prices or invest more in research and development.whether there are any Canadian competitors who could be a takeover target, perhaps because of financial difficulties.whether there are any US companies which have the cash/share price to do this.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |