No business life lesson can be complete without a discussion on risks and risk management. Risks are inherent in everything we do - from crossing the road to running a business. Business risk management is the key to ensure risks are identified and a plan-B thought of. Some risks we can control while others we cannot. The mere mention of business risk evokes different feelings depending on our disposition towards risk. Some of us are risk acceptors (the entrepreneurs and innovators) while others are risk averse while still others are risk neutral.
Before we even begin our discussion on a business risk management strategy, let’s be clear on what the term means. A number of people mistakenly associate risk with just bad things. “Oh! Let’s not invest there, it’s risky. We could lose our money.” Or “It’s too risky to take on this project.” But, risks can be good and bad. An effective business risk management strategy ensures you recognize the good and the bad.