Risk Management – 10 Tips to Minimize Risk

Risk has been given by every business and can cause damage to an enterprise, and even threatens its survival. Therefore, it is imperative to be aware of the various risks, to understand the potential impact of business, and to know how to handle it efficiently. This article contains a few tips to minimize risk:

  1. The product and service offering of a business must be changed with customers' preferences. Too much to rely on a product (some products too) should be avoided.
  2. Recommended alternative supply chains (including suppliers and sales channels). Good relations need to be established for all stakeholders.
  3. Debt promotes growth in companies. It is dangerous, however, to take too much debt and to limit it to only the level of improvement.
  4. One or a small number of customers may be very risky and wherever possible should be avoided.
  5. Appropriate financial planning needs to be done. Cash flow planning is an area that highlights potential risks and then proactive action can be taken.
  6. Financial management must be continued. The ratio analysis shows where the problem areas are (eg Profitability). It also indicates the liquidity and solvency risks.
  7. We recommend that you cover the business as much as possible against factors that are not in control of your business. This is particularly true of international trade and unexpected exchange rate fluctuations.
  8. Business growth must be maintained at a sustainable level. There is too much growth that can seriously hit the financial resources and cause bankruptcy. Systems and skills should also keep up with growth.
  9. The appropriate manufacturing standards must be observed. Non-standard products may damage your company's image or even completely destroy it.
  10. People are the core of every business and they have to be treated. But people leave the business for various reasons. Where appropriate, sensitive information should be protected by security confidentiality agreements and trade restriction agreements.

Copyright © 2008 –

Wim Venter

Source by sbobet

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