6 fundamental risks every business owner must not take for granted

Running or managing a business irrespective of the size, requires that the owners or managers are fully aware of the fundamental risks they may face in their daily operations.  

Risk is the possibility of something bad happening to your business and making it impossible for you to realize your business objectives.  

Some risks may be known while others may not be known. For example, the risks and losses associated with the COVID-19 lockdown and the recent #EndSARS protests.

In all things, it is vital that the business owner articulates the type of risks he is to contend with and find appropriate ways of managing them – ignoring them as if they do not exist could jeopardize the continued existence of the business enterprise, in line with the popular parlance that “ignorance is not excuse”. 

In fact, nobody can eliminate the business risks, but being aware of them all and proactively planning on how to manage them can be quite helpful.  

Any business owner that wants to reap the dividends of their investment in the business must consider the following risks and plan how the risks are to be sufficiently mitigated.

Operational risk

Operational risk is the prospects of loss resulting from inadequate or failed procedures, systems, or policies like employee errors, inadequate processes and procedures, system failures, fraud or other criminal activities by staff or any unfavorable events that could unduly expose the business to losses. 

One unexpected event is just enough to crumble the business. It could come in form of natural disaster, riots/protests, technical issues, burglary, or fire that could destroy the physical structure of the business or cost huge losses to the business.