Types of Business Risks That You Are Prone to
You know very well that the world of business is dynamic. How do you handle uncertainty risk? The future is uncertain and what seemed to work very well yesterday is not a guarantee that it works today. Things change any time and the changes may bring opportunities or miseries in your businesses.
Planning alone cannot completely free us from risks. Many businessmen get it wrong that if they plan well, their businesses are completely protected from uncertainty risk. Of course, there are some losses that you cannot control.
The current markets are full of aggressive marketers who compete to outdo their competitors. If you fail to be alert on what your competitors are doing in the market, then you risk from losing business.
Even though you realize losses in your business, the good news is that you are able to mitigate them. There are several ways you can prevent them from ruining your business. Probably you know that…
You notice that the marketing process you undertake everyday involves uncertainty risk. If a loss occurs in the course of executing your marketing process, then it denies you profits you are expecting after selling your services or products.
Three Types of Risks
A. Changes in the Market Conditions
They result from fluctuations in the market prices. The fluctuation in the market is brought about by three factors, namely; time, place and competition. Let’s discuss each factor into details.
1. Time Factor
Time plays a great role in influencing prices in any market. If not well managed, then it may bring losses. Producers may manufacturer products in large quantities with the anticipation that price increases. The whole sellers and retailers stock these products in large quantities with the same anticipation. But later on, the anticipated increase in prices does not occur in the market.
