33 Small Business Risks John Spacey, updated on
A small business risk is the potential for negative outcomes related to your business. Small businesses are particularly vulnerable to risk as things can be tough enough for a new venture even when things go smoothly. Risk can be managed by identifying and treating them. The following are common small business risks.
Budget RiskGoing over budget.Commodity RiskThe price of basic commodities such as fuel, foods and materials.Competitive RiskNew competition or competitive actions such as a price war.Compliance RiskBeing deemed to have violated a law or regulation. This can happen despite your best efforts to comply to the law. For example, you may be responsible for certain actions of employees.Concentration RiskA business that is too focused on a particular market. For example, a farmer who only grows corn is vulnerable to its price.Contract RiskWhen partners, suppliers and employees fail to meet their contractual obligations.Credit RiskThe risk that a customer won't pay what they owe you.Exchange Rate RiskFluctuating exchange rates that increase your costs or decrease your revenues.Dispute RiskThe chance of a costly dispute with a supplier, partner, customer or member of the public.Economic RiskThe chance that the economy will experience a downturn.Financial RiskThe risk of a financial loss such as a failed investment.Force MajeureA major negative event such as an earthquake, storm or war.Health And Safety RiskA health or safety incident related to your business.Infrastructure RiskInfrastructure issues such as a network outage.Innovation RiskThe chance that a new innovation will invalidate your business model.Interest Rate RiskA negative interest rate change such as a floating rate loan when interest rates go up.Legal RiskA legal event such as a lawsuit.Liquidity RiskRunning out of cash.Local Economy RiskThe risk of a decline in the local economy.Operations RiskFailure of a business process such as a late delivery that requires you to pay penalties.Passive RiskRisk is often associated with action, but inaction can also be a risk. For example, sitting still while a competitor rapidly improves.Procurement RiskAn inability to procure what you need at the right price, quality and time.Quality RiskWhen your products or services fail to meet the expectations of customers resulting in poor ratings and declining business.Refinancing RiskThe chance that you won't be able to refinance when a loan expires.Regulatory RiskNew laws that interfere with your business model or profitability.Reputational RiskAn negative event or chain of events that damages your reputation.Resource RiskInability to obtain resources such as skilled employees.Seasonal RiskA special risk related to a business that does most of its sales in a short span of time such as a ski resort in an area with a few months of snow.Security RiskThe potential for an information security or physical security incident.Strategy RiskA failed strategy such as a new product that flops.Taxation RiskThe potential that tax laws or rates will change.Technology RiskFailures related to technology such as a website outage.Weather RiskMany businesses that have a physical location are exposed to lower sales in bad weather.Everything that you could possible want to know about risk:
If you enjoyed this page, please consider bookmarking Simplicable.
Types Of Small BusinessA list of common small businesses.
EcommerceA list of ecommerce business models.Promotion StrategyA list of promotion techniques.Business CostsA list of common types of business cost.Entrepreneur Definition
A definition of entrepreneur and comparison to terms such as business owner and startup founder.
Micromarketing
The common types of micromarketing.
Local Marketing
Common types of local marketing.
Business Name
A list of common types of business name.
Business Competition
The common types of business competition.
Business RisksA list of common business risks.Risk TreatmentThe five things that can be done about risk.Risk MitigationA list of techniques for reducing risk.Positive RiskThe potential that you'll achieve too much of a good thing.Dread Risk
Any risk that people have a strong aversion too.
Risk vs Opportunity
The surprising similarities between risk and opportunity.
Risk Management vs Contingency Planning
The difference between risk management and contingency planning.
UncertaintyThe common types of uncertainty in decision making and strategy.Inventory Risk
The common types of inventory risk.
Business Risk Management
An overview of common business risk management techniques.
TrendingThe most popular articles on Simplicable in the past day.New ArticlesRecent posts or updates on Simplicable.
© 2010-2024 Simplicable. All Rights Reserved. Reproduction of materials found on this site, in any form, without explicit permission is prohibited. View credits & copyrights or citation information for this page. |