RISK in Business

Risk and Business

When we get in to Business, inadvertently we are exposed to risk.

There is no business in this world, which is risk free.

Whenever we mention that a business as not having risk at all, we actualy mean that it has very low risk.

Risk is of three types in the context of business 

1. No(Low) Risk,
2. Good Risk and
3. Bad Risk.

If we are sure about only positive results(or already getting the required results), then the risk is considered to be very low or 0.

Congratulations.
This breed of risk free business is far and few between. 

Good Risk:

Simply put, Good risk is a studied risk.

Good risk is one, which has clarity in terms of possible road blocks, repercussins, losses and impacts in the event of not being successful.

This exercise of studying parameters, grossly increases the possibility of success, thus reducing the risk. 

Still, there is no guarantee that Good risk will only produce positive results.

But, A good risk
1. increases the success probablity, 2. prepares us quite well for any eventuality arising out of the risky environment and
3. protecte the business from possible heavy losses. 

Bad Risk:
On the other hand, bad risk is unqualified and without rational analysis or reasoning. 

Bad risks are taken with limited or no study or knowledge, mostly in situations of urgency, pressure and When emotional.

Most businesses succumb to bad risks, because of the following:
1. Bad risk is taken blindly
2. The impacts and implications are either under-estimated or not known.
3. Inly ideal situations are considered and surprises come as a jolt since there is no mechanism ro handle surprises.
3. The state of unpreparedness throws one off-balance and needs a longer time to recover
4. Backups or alternatives are generally unavailable making the situation tough. 

Business is risky is given.
There us no escape to it.

The best one can do is
1. to understand and analyse the risk,
2. Workout ways and means of avoiding them
3. Prepare for the eventuality and
4. Have backup or secondary plans in place

Then, the risk can be mitigated and handled well, sometimes even to the advantage...

No Risk....
No income....

Muralidharan Margabandhu