Managing Business Risks Amidst Challenges

Risk management has always been an important issue in starting or running any business. 
Most times the economic situation of the business environment plays a major   role in determining the level of risk. Risk can destroy a business suddenly in the absence of risks management strategies to prevent, or  mitigate the damage from that risk.
The Tide Senior Correspondent, Lilian Peters moved to the business community to feel the pulse of entrepreneurs on how to contain with the many risks involved in running a business, as there are External and Internal risks.
Read on:

The Principal Officer of Puregold and Puregrace Ltd,  Madam Helen  Ibeanu said, “a business risk is the resultant effect of action or inaction that stifles the growth of a business or organisation which leads to the liquidation of same”.
Ibeanu who is also the  chief consultant of Ubaku farms identified different types of risks which should be guarded against to ensure the continuation of the business.
“We have, ‘Recruitional process risk’,  compromising the recruitment process. ‘Security risk’, which has to do with subversion of the best practices in security and ‘Operational risk’, that concerns itself with the day to day policies and process of running the business. This can make or mar the vision and mission of the business.
“There is also, ‘Financial risk’, which deals with accounting & investment and ‘Reputational risks’, that has to do with the integrity of a business entity”, she said
She noted the need for  business operations to be run  professionally, saying, “Consultants should be used to help in implementation and assessment. There are various softwares now that can help manage a business.
“Companies also should employ risk  management personnel. This helps in the management,  especially financial risks that can be undertaken, she said.
She also noted that, “one cannot totally prevent business risks but can eradicate it. Risks can also be healthy too. It can help in building experience and growth.
“Entrepreneurs contribute majorly to risks because they are decision makers and are in a position to hold everyone accountable. To minimise the risks they should be interested in training,retraining and appraisals.
“I have been in business for over 20 years. We have experienced lot’s of risks.
“Recruitment of efficient staff has helped. Supervision has also helped to minimise risk but more importantly, effective accounting system has been the saving grace most of the time”.

To the Chief Executive Officer (CEO) of   EMELIKE UKAZU LTD, a business development consultant, business risks are factors that expose businesses to danger, loss or unfortunate consequences.
The CEO identified five common types of business risks; “Strategic Risk. Even with a well thought out plan, a company’s  strategy can become less effective. Operational risk. This is day to day exigencies/demands  arising from daily routines.
“Financial Risk.  There are always possibilities of financial losses from short fall in revenue, sales, competitors eroding your clientele base. 
“Reputational Risk. This has to do with business relationships being built  on trust/ reputation and breach may result in a run down of the business. Compliance Risk.  Every business must endeavor to comply with the industry laws, government laws and regulations that are applicable to their line of business
Ukazu noted that the the first step towards preventing business failure from the risk is to identify the risk, “for a risk like strategic, you need constant and never ending improvement. A constant review of the effect of these risks are necessary.
“The risk factors cannot be eradicated. It can only be managed. Entrepreneurs do contribute to the risks. Some have limited knowledge of the business environment they operate in, some depend on the knowledge that worked once and don’t care about improvement. Like I said earlier constant and never ending improvement is the key”.
The CEO noted that he has been in his line of business for more  than six years now, adding, “risks are part of every business life and mine is not exempted. To manage business risks, one had to be involved in Training/Studying and always look out  for alternatives/improvements.

By: Lilian Peters