Question

Risk Analysis. Risks are a natural part of entrepreneurial activity. This area of the plan seeks to identify the risks involved in starting your business and determining how you will deal with them. Major areas of risk you should cover include: Industry Risk Technology and Operational Risk ,Financial Risk ,Reputational Risk and Personnel Risk when opening a bed and breakfast in a caribbean country.

Answer 1

Opening and Bed and Breakfast entity in a Caribbean country is great business to do as it has its own advantages and specialty and a set of people which usually prefers these kind of set up rather than going for the big chain usual hotels.

However, any business comes with its own set of issues and risk and therefore risk management also comes into picture. These risks are generally: Industry Risk Technology and Operational Risk, Financial Risk, Reputation Risk and Personnel Risk. All these risk when occurs will involve a risk management task for the entity to overcome it and put the business back on track.

• Industry risk Technology: This risk does not originate from within the business but is the result of macro factors affecting the industry as whole. In these all the similar business are affected. In case of Bed and Breakfast business, the industry risk can be managed by mitigating the risk factor through adopting the best practice and technology and utilizing it in its process of customer services.
• Operational risks: Operation risk can be from within the organization and that usually happens with internal people, non-functioning of certain unit or department, non-availability of resources which affects the breakfast and service of bed and breakfast business etc. However these risks can be mitigated by having a robust meeting and procedures and team designated to do risk assessment and formulate immediate strategy to recover from it.
• Financial risk could be loss that may occur in the business of investor pulling out their fund for the business. Thus managing and ensuring the good finance and ensuring profit for the business is must to run the business
• Reputations risk: Many businesses run the fear of having the reputation risk. Reputation of the business is developed over a period of time through the ratings and feedback it receives from the people it serves. Thus if reputation of the business is bad people would not like to come to the place. Thus it is important for bed and breakfast business to provide best services so that good reputation is built up.
• Personal risk: Personal risk is something which the owner has to think about. The risk of the owner of the business would be to lose his own investment, time in the business if the business does not run and therefore the personal risk can be mitigated by actively participating business and making sure that the business runs smoothly and any risk associated factors must be resolved or removed.