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John Spacey, July 24, 2017 updated on December 30, 2022
Revenue risk is a potential event or condition that negatively impacts your future revenue. This includes forces beyond your direct control such as economic conditions and elements of your strategy such as product launches. The following are illustrative examples of revenue risk.
PricesDeclining prices due to competition and market forces such as commodity prices. Operational risks such as a supply chain disruption that results in reduced supply of your products.An information security incident that disrupts your services or marketing channels.
Distribution issues such as a dispute with a channel partner that leads to decreased sales in a particular region.A promotional campaign such as a catalog mailing that doesn't achieve what you expect.Sales problems such as an unpopular incentive plan that causes several top performers to leave your sales team.
Customer ChurnCustomer attrition due to customer satisfaction issues or competition.Brand related risks such as declining brand awareness and recognition.ReputationReputational risks such as a hotel that receives bad publicity due to a customer service incident. This causes declining reviews, rankings and bookings.
Concentration risk a lack of product or customer diversification. For example, a firm that generates 40% of its revenue from a single customer.An economic downturn that causes customers to cut back on spending.The value of foreign sales can decline due to exchange rate fluctuations. Such fluctuations can also make your products less cost competitive in foreign markets.
Tariffs and other trade barriers that reduce your global sales.Political risks that disrupt your operations or sales.Product development risk such as a failed or poorly received product launch.
Competition such as an innovative new product that causes a sharp decline in demand for your products.Shifting customer needs or preferences that reduce demand for your products or services.Firms that generate most of their sales in a particular season are exposed to disruptions that occur in that season such as poor weather.Changes to your bankability such as liquidity problems that make customers less likely to close deals.Accounts ReceivableDifficulty in collecting revenue.A large scale negative event over which you have no control such as a hurricane.|
| Type | | | Definition | A potential event or condition that negatively impacts your future revenue. | | Related Concepts | |
Risks
This is the complete list of articles we have written about risks.
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