Risk management as an entrepreneur - LEE YANG QING (TP071206)

 What do you understand the good concept and tools for risk management? How to manage risk as an entrepreneur?

Managing your business is a must as external risks are always out of your control. These include, but are not limited to, interest rates, exchange rates, politics, and weather. Internal risks are in your control and include information breaches, noncompliance, lack of insurance, growing too fast, and many more. People should master the risk identification skills that involves systematically identifying all potential risks that could affect the organization’s projects. SWOT analysis, flowchart and checklists are the tools that commonly used to identify risks. (Calle, n.d.)

Therefore, prioritising risks and threats should always be the first step in developing a risk management plan (Moskowitz, 2023). Generally, a risk that fits into the highest category should be given priority over the others, and measures to either prevent or at least lessen this risk should be taken. There is a catch, though. When a danger is categorised as lesser risk but has a higher potential for financial loss, it should be prioritised.

Besides, having a solid reputation is essential for a long-lasting business. Successful customer service is essential. To ensure the best quality, make sure you test your goods and services (Moskowitz, 2023). You will be able to make the required corrections by examining and testing what you're providing. Furthermore, you should really think about going one step further and assessing your testing and analysis procedures.

Apart from that, growth control is a not bad idea for you to control your business risk. This is entirely related to training employees. Employees may be motivated to take unwarranted risks if you set high expectations for them when selling goods and/or services, which could damage your company's reputation. Instead, teach your staff to prioritise quality above quantity. By doing this, you can reduce the possibility that your sales will decline as a result of pushy sales techniques that your clients find annoying.

SWOT example

References

1. Calle, J. P. (n.d.). 5 tools to identify risks in a company. https://www.piranirisk.com/blog/5-tools-for-identifying-risks

2.Moskowitz, D. (2023, May 4). Top ways to manage business risks. Investopedia. https://www.investopedia.com/articles/personal-finance/072315/top-ways-manage-business-risks.asp