Question

Given the importance of risk management, what type of decisions should a small business manager consider when mitigating and/or minimizing a high priority risk? What key aspects of any approach to risk management are critical?

Answer 1

While dealing with risks the manger must take decisions regarding the various aspects of the business such as business risks, financials risk and prtfolio risk. The business risks includes the main functions of the business such as production, procedures, policies along with other factors such as customers, competition , labour etc. In financial risk the manager has to take decisions regarding the various financial activities of the firm. These risks include inconsistancy in profit, bad debt etc. The portfolio risk are associated with the various investment in the business. In the portfolio risk might result in decrese in profit.. In order to deal with these risk The manager must make a suitable risk management plan which will help the company if any emergency or risk occurs. The manager should also take proper decision in taking up an insurance plan which will protect the company from the potential losses that might occur at the time of emergency.