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74 Types of Business Risk

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A business risk is a future possibility that may prevent you from achieving a business goal. The risks facing a typical business are broad and include things that you can control such as your strategy and things beyond your control such as the global economy. The following are common types of business risk.
Accounting Risk
Acquisition Risk
Audit Risk
Brand Risk
Budget Risk
Business Continuity Risk
Capacity Risk
Cash Flow Risk
Commodity Risk
Competition Risk
Compliance Risk
Concentration Risk
Contract Risk
Cost Risk
Counterparty Risk
Country Risk
Credit Risk
Currency Risk
Customer Risk
Cybersecurity Risk
Demand Risk
Disaster Recovery Risk
Economic Risk
Environmental Risk
Estimate Risk
Exchange Rate Risk
Facility Risk
Financial Risk
Financing Risk
Fraud Risk
Health & Safety Risk
Inflation Risk
Information Technology Risk
Infrastructure Risk
Intellectual Property Risk
Interest Rate Risk
Inventory Risk
Knowledge Risk
Legal Risk
Liquidity Risk
Market Risk
Marketing Risk
Operational Risk
Outsourcing Risk
Partner Risk
Platform Risk
Political Risk
Price Risk
Process Risk
Procurement Risk
Product Liability Risk
Product Risk
Project Risk
Quality Risk
Recession Risk
Recruiting Risk
Refinancing Risk
Regulatory Risk
Reputational Risk
Requirements Risk
Resource Risk
Revenue Risk
Sales Risk
Schedule Risk
Seasonal Risk
Service Risk
Social Responsibility Risk
Strategic Risk
Succession Risk
Supplier Risk
Supply Chain Risk
Taxation Risk
Technological Disruption
Weather Risk

Economic Risk

The possibility that general conditions in the economy will increase your costs, reduce your sales or disrupt your operations.

Financial Risks

Risks to a firm's financial health such as the risk of running out of the cash required to meet your current obligations.

Market Risk

Risks related to market conditions such as customers, competition and pricing.

Operational Risk

Operational risk is the potential for failure related to your core value creation processes. For example, if you are a hotel this would be risk to your facility management and customer service processes.

Technology Risk

The potential for losses due to technology shortcomings or failures. This prominently includes technology outages that impact operations and revenue. Technology risk also includes cybersecurity risk and compliance risks.

Project Risk

Risks to projects such as schedule, budget and quality risks. Project risks also include the potential for projects to cause operational disruptions or other business problems such as customer attrition.

Strategic Risk

Risk to a business's goals, objectives and plans. This includes immediate risks such as competition and long term social, cultural and technological change that may derail a firm's business model or viability.

Overview

A business risk is the potential for any unplanned or unexpected outcome that negatively impacts a business.

Summary

The following are common types of business risk that can impact the financial performance, operations and brand value of a firm.

Discussion

Competitive risk is the potential that your competition will gain advantages over you that prevent you from reaching your goals. For example, competitors that have a fundamentally cheaper cost base or a better product.
Regulatory risk is the chance that new regulations will disrupt your business or that you will incur expenses and losses due to compliance costs.
Compliance risk is the chance that you will violate regulations. In many cases, a business may fully intend to follow the law but ends up violating regulations due to oversights or errors.
Country risk is your exposure to the conditions in the countries in which you operate such as political events and the economy.
Quality risk is the potential that you will fail to meet your quality goals for your products, services and business practices.
Credit risk is the risk that those who owe you money to fail to pay. For the majority of businesses this is mostly related to accounts receivable risk.
Exchange rate risk relates to volatility in foreign exchange rates. Many global businesses have high exposure to a basket of currencies that can add volatility to financial results such as operating margins.
Interest rate risk is the chance that changes to interest rates will disrupt your business. For example, interest rates may increase your cost of capital thus impacting your business model and profitability.
Taxation risk is the potential for new tax laws or interpretations to result in higher than expected taxation. In some cases, new tax laws can completely disrupt the business model of an industry.
Process risks are the business risks associated with a particular process.
Resource risk is the chance that you will fail to meet business goals due to a lack of resources such as financing or the labor of skilled workers.
Political risk is the potential for political events and outcomes to impede your business.
Seasonal risk is a business with revenue that's concentrated in a single season such as a ski resort.

Risk vs Reward

There is a strong relationship between risk and reward. It's generally impossible to achieve business gains without taking on at least some risk. Therefore, the purpose of risk management isn't to completely eliminate risk. In most cases, risk management seeks to optimize the risk-reward ratio within the bounds of the risk tolerance of your business.
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More about business risks:
Audit Risk
Bankability
Budget Risk
Business Risks
Commodity Risk
Contract Risk
Cost Risk
Country Risk
Credit Risk
Data Loss
Dispute Risk
Economic Risk
Facility Risk
Financial Risk
Force Majeure
Grey Goo
Infinite Risk
Inflation Risk
Inherent Risk
Innovation Risk
Internal Risks
Investing Risk
Legal Risk
Liquidity Risk
Market Risk
Model Risk
Operations Risk
Partner Risk
Passive Risk
Political Risk
Price Risk
Process Risk
Progress Trap
Quality Risk
Recession Risk
Regulatory Risk
Resource Risk
Revenue Risk
Risk
Risk Impact
Risk Of Ruin
Risk Tolerance
Seasonal Risk
Security Risk
Settlement Risk
Short Squeeze
Strategic Risk
Supplier Risk
Systemic Risk
Tactical Risk
Taxation Risk
Technology Risk
Weather Risk
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Competitive Risk

An overview of competitive risk.

Financial Risk

A list of common types of financial risk.

Investing Risk

A list of common investment risks.

Legal Risk

The definition of legal risk with examples.

Operational Risk

The definition of operational risk with examples.

Passive Risk

An overview of passive risk.

Political Risk

The definition of political risk with examples.

Resource Risk

The probability that you will fail to meet a goal due to a lack of resources such as skilled workers or financing.

Strategic Risk

The definition of strategic risk with examples.
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