Business Analysis

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Running a business can be a dangerous occupation with many different types of risk. Some of these potential hazards can destroy a business, while others can cause serious damage that can be costly and time consuming to repair. Despite the risks implicit in doing business, CEOs and/or risk management officers – no matter the size of the business, from small to corporate giant - can prepare for them if they know what they are. If and when risk becomes reality, a well-prepared business can moderate the risk's impact. Dollar losses, lost time and productivity and the negative impact on customers can all be minimized. Physical Risks Building risks are the most common type of physical risk. Fire or explosions are the most common risk to a…show more content…
Power surges may occur during a lighting storm, or randomly, so computer systems should be furnished with surge-protection devices to avoid loss of documents and destruction of equipment. Offline and online data back-up systems should be used to protect critical documents. Although telephone and telecommunications failure is relatively uncommon, risk managers may consider providing emergency-use-only company cell phones to personnel whose use of the phone is critical to their business. Prioritizing Risk After the risks have been identified, they must be prioritized in accordance with your assessment of their probability. Establish a probability scale for purposes of risk assessment. For example, risks may be: 1. Very likely to occur 2. Some chance of occurrence 3. Small chance of occurrence 4. Very little chance of occurrence Other risks must be prioritized and managed in accordance to their probability of occurring. Actuarial tables – statistical analysis of the probability of any risk occurring, and the potential financial damage ensuing from the occurrence of those risks – may be accessed online and can provide guidance in prioritizing risk. Managing Risk Insurance is a principle safeguard in managing risk, and many risks are insurable. Fire insurance is a necessity for any business that occupies a physical space, whether owned outright or rented, and should be a top priority. Product liability insurance, as an obvious example, is not necessary

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