Risks As Part of Business: Non-Criminal and Criminal Risks
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by: robertjohnston
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Word Count: 554
Risks are part of business. It can be both within the control and beyond the control of the entrepreneur. To eliminate or minimize such risks, the entrepreneur must have a risk and insurance program. The following are common types of non-criminal business risk:
Fire. This is the first fear of any business owner. Especially those who run a printing business catering on hang tag printing, business cards, brochures and other printed materials, because papers easily catch fire. So, it is best to eliminate their risks through fire insurance. With such insurance, owners especially those in the printing business or hang tags business, can recover their financial losses. However, there are things which fire insurance cannot protect, like lost customers, records and other valuable assets. A much better risk protection program is fire prevention measures.
Natural calamities. These can ruin your business and you can’t do anything about it. Floods, typhoons and earthquakes are in most cases not included in the insurance coverage. Entrepreneurs can only minimize risks from natural calamities by proper choice of locations which are free from such disasters.
Personal liabilities. These are business-connected risks. For instance, a customer is injured while inside your store. A customer got sick eating your products. Such incidents may resort to law suits. Such risks can be prevented or minimize by proper facilities or quality control program.
Economic problems. These have direct effects on the profitability of the enterprise. Recessions, depressions, inflation and massive unemployment can reduce sales of goods and services. Such economic problems lead to a sharp fall in demand or purchasing power of consumers. The ability to adjust to such changing economic conditions is a plus factor. Another, adequate financial resources during bad times for business can be a good protection from business losses.
Business interruptions. Strikes of employees and suppliers pose a great business risk. Awareness of such problems can help the entrepreneur prepare for the unexpected. The entrepreneur must have good stockpiling strategy. However, a strong financial position greatly helps the enterprise survive during such business interruptions.
Loss of key personnel. The resignation of important employees is a big blow to the business enterprise. For example, resignation of an expert or technical specialist can cause work stoppage. It is not easy to get replacements immediately.
There are also business risks that are criminal in nature. Such risks are personally planned or intended. Some of which are:
Burglary. You need to protect inventories, supplies, equipment, etc., by providing safety facilities. Others use dogs, guards, and alarm systems.
Robbery. Installation of proper alarm devices, lighting facilities and other preventive measures can eliminate robbery.
Shoplifting. Aside from professional shoplifters, other customers are possible threats. Children pick goods without knowing they are committing a crime. Even in rich countries, there are shoplifters. Mirrors , store lay-outs and surveillance cameras can deter shoplifting.
Employee Theft. Avoid temptations for employees such as open storage rooms, desks, cash registers and the like. There should be a strict hiring policy for personnel involved in the handling of money and products.
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