Be it a small scale or large scale business there will be a considerable amount of risk involved in all types of business. The risk may vary according to the size and type of the particular business. Risk management is an art and you need to excel in this in order to be a successful business owner. You are the sole responsible for the success or failure of your business. You need to be aware of certain things that will play a spoilsport in your business. Here are the types of risks involved in both small scale and large scale businesses.
Types of risk in business
Both small and big companies include different kinds of risks, namely
- Physical risk
- Strategic risk
- Compliance risk
- Human risk
- Technology risk
- Financial risk
Physical risk and strategic risk:
The common physical risks are fire accidents, water damage, theft, etc. there may be a lack of resource, poor execution or change in the business environment is the strategic form of risk.
Compliance risk:
There will the set of Rules and regulations will be provided for all small as well as big business companies. The possibility of failing in that legislation and regulation comes under compliance risk.
Technological and financial risk:
The software failure may occur often which comes under technology risk. Many business companies face financial risk due to a lack of investment.
Risk management plan
To create and plan for the risk that occurs in small Vs big business companies includes
- Identify potential tasks
- Conduct risk analysis
- Identify warning signs
- Identify preventive measures
- Assign responsibility
Importance of risk management
If there is an issue found that put your business at risk, it is necessary to have a plan for them in advance. This is how one can manage the risk of either a small or big business companies.
So that the small business companies possess a basic form of risk whereas the bigger business companies are in the higher rate of risk. This can be overcome with the help of certain management plans.