what is a business risk and what are some of the factors that influence a firms business risk as it relates to their business operations or marketplace. Explain what the difference between financial and business risks within a business structure.
Business risk is the possibility of loss or less profits due to uncertainty such as increases competition , change in policy , change in taste etc .
Financial risk - It is the part of your financial structure of your business , business transactions . You could be overreliant on a single consumer or change in interest rates .
Employee risks - Sometimes some of your staff may go to strike or some critical employees are not well or not in fit condition . This may cost your company loss of money .
Health and safety - If there tends to be a change In regulations regarding safetype, health or quality . Then this might result in higher costs and reduce of profits .
Political and economical risks - Some companies may be affected by the policies of governments . Some change In the rules and regulations may make significant difference in a companies profit and may also bring it down .
Strategic risks - This risk is associated with the operations of a particular industry . They could be due to changer in consumer demand or technological evolutions which could pose a threat in regard to how you products are viewed or perceived by your customers .
BUSINESS RISK is different from FINANCIAL RISK because it is independent of amount of debt a business owes .
Aug 12th, 2014
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