4 Commercial Risk Areas
Risk management and a comprehensive approach to commercial liability through a reputable insurance agency in Orlando are the two primary ways to protect your company from the five major risks all businesses are exposed too. By knowing these areas of exposure, you can be better equipped to set your business affairs in order and protect your investments.
1. Strategic Risk
Even with the best plans, things can change quickly in the business environment. Technology and software are some of the new demands on business innovation, and making an investment into the newest equipment, adapting to customer demand, or facing new market competitors are all a part of facing strategic risk. If your company isn’t able to adapt to the risk, you may get left behind.
2. Compliance Risk
If your company isn’t complying with all of the regulations and laws that apply to your industry you can find yourself facing extensive fees or possibly a shutdown. As the political and economic landscape continues to change, your company will have to adjust to changes that may not have applied to you before. Compliance risk is an area than can affect employment practices, operation standards, and investment abilities.
3. Operational Risk
Some risks aren’t related to external influence. You can experience unexpected failure during daily operations beyond your control, like a power outage or server crash. It can also come through employee error with accounting functions or contract errors. People and process failure can cost your company some serious cash.
4 Financial Risk
All of the risk categories carry financial impact, as it is related to the loss in revenue or extra costs dealing with management. This area deals more specifically with the funds going in and out of the business. Delays in customer payments on extended credit terms or having significant company debt can eat up your funds and put you in financial risk.
Knowing these four areas of risk help you as you prepare to run your business. Invest in the tools and resources need to protect your company and personal investments.