Principal types of business risk that you should be aware of

Risk can be described as an uncertainty, in that there is the possibility of you not having a positive return from your initial investment. Risk can be as a result of being exposed to danger (which can be economic, social or political) that can have a negative impact on your business performance. The following are some of the risks that you as a business owner should always bear in mind as you continue with your day to day endeavors.

  •         Strategic risks

This type of risks arises from business operation in a particular industry for a given duration of time. These risks can be associated with a change of the consumer preferences or difference in technology levels and performance that can result in your product becoming obsolete. The only way you can counter this type of risk and keep them in check is by regularly obliging with the customer feedback to ensure that you remain relevant.

  •         Compliance risks

Compliance risks result from the negative impacts that can affect business as it complies with the rules and regulations. A good example of rules and regulations that can affect our company is the employee protection regulations imposed by the lawmakers like OSHA which stands for Occupational Safety and Health Administration.

  •         Financial risks

Financial risks come about from the manner in which money is handled in your business. Some of the financial risks arise because you may not be sure who may be the credit worthy people in your customer base and for how long can the customer stay without paying for the credit given. Others may arise from having few clients that fund your business being in a position that they can’t afford to pay and lastly because of the fluctuations of interest rates.

  •         Operational risks

This type of risks arises from having an internal failure. Internal business failure can result from some things like your business system breaking down, employees being weak in their work and so on. In this type of risk, you don’t get any return something that is possible in both financial and strategic risks. Other external factors that are sources of operational risks is a breakdown of a transport system that can cut down your supply chain.    

In conclusion, other business risks are not easy to classify them. For example, environmental disasters cannot be branded in the four types of business risks, yet they may cause uncertainty of future cash flows.

Crucial advantages of business networking

Business networking is a unique path that you can follow for knowledge expansion, landing new customers, bench marking other successful businesses, and developing your business brand.

Through business networking, you can seamlessly acquire bigger customer base, all while also creating a viable business structure that is able to meet the long-term goals. The following are some of the critical benefits of business networking, especially to the business owners.

  •         Increased referral generation.

By far referral generation is the most straightforward benefit that can make a business owner engage in business networking. This means starting or joining already established business networking groups.

Referrals from business networking are always beneficial to the business because they are always of good quality, and you are always assured of making money from the engagement.

  •         Opportunities.

Whenever a number of focused business owners come together there is always one result of name opportunities. With increased business networking there is always more and better business opportunity which makes business networking to be very beneficial.

When we talk about business networking opportunities, we mean partnerships, asset sales, client leads, tenders and so on. In truth, we cannot exhaust all the business opportunities that result from extensive business networking.

When you have set up the right business network and business opportunities are starting to flood your way, remember to keep calm, and carefully research to ensure that you choose a viable business opportunity that will maximize your potential and effectively exploit your abilities.

  •         Connections.

One wise man said that “who you know is always better than what you know.” That phrase also applies in the business world especially if you want to succeed. By having a pool of reliable connections, you are assured that if a problem arises during the business operation, the network team will help you out.

Business networking can provide the right business connections, which in turn mean that more and more people of prominence are easy to find and communicate with. Moreover, your connection can even introduce you to a new and a better business networking group which can really open your doors.

  •         Increases your reputation.

Another advantage of business networking is that it raises your overall reputation which allows your enterprise to be more popular and get more clients. To revitalize your business as a brand and its profile, you should attend more business conferences and other events (both social and economic). By doing that, you put yourself in the spotlight to be noticed by more people and who might be possible clients.