Business Risk Assessment

Business risk assessment is a very important part of conducting business operations in a company. When a fir, seeks to make new investments or start any business venture or project, business risk assessment is an important step which helps the company identify and assess various risks associated with the project which can lead to losses. This aids the decision-making process and helps to form business strategies accordingly. While conducting business risk assessment, the following areas must be covered: Quantifying potential losses, determining the chance of a loss, probability of the risk reoccurring, potential impact, insurance coverage, suggestion of preventive measures and so on.

Sample Business Risk Assessment:

The following risk assessment has been made by Analysts Org, California

Name: Blue Chip Org

Address: 922 Greenview Drive, California

Objective of assessment: To identify the business risks the company may face in the future and to quantify them so that counter measures can be applied to avoid these risks

Problem areas:

  • The slump in the economy is the most negative factor in this case and like any other company Blue Chip is also facing low sales in most of its markets, leading to loss of $40,000 per month
  • The two new projects started in Northern US is having problems finding investors and adequate funding
  • Its center in Ohio is not reaching the performance target and there is a chance that it will have to be closed down

Assessment and recommendations:

  • The company should focus on key areas and close its non-core units which will save up to $30,000 per month
  • The company should cut in-house expenses wherever possible

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