Business risk is a future possibility that may prevent you from achieving a business goal. The following are the common type of business risks.
Strategic Business Risk
Strategic risks result directly from operating within a specific industry at a specific time. To counteract strategic risks, you’ll need to put measures in place to constantly solicit feedback so changes will be detected early.
Legal Compliance Risk
Risks associated with compliance are those subject to the legislative or bureaucratic rules and regulations, or those associated with best practices for investment purposes.
Internal Operational Risks
Operational risks result from internal failures. That is, your business’s internal processes, people, or systems fail unexpectedly. Operational risks can also result from unforeseen external events such as transportation systems breaking down, or a supplier failing to deliver goods.
Reputational and Publicity Risks
Loss of a company’s reputation or community standing might result from product failures, lawsuits, or negative publicity. Reputations take time to build but can be lost in a day. In this era of social networking, a negative Twi tter posting by a customer can reduce earnings overnight.