Risk can be described as an uncertain event or condition that, if occurs, has a positive or negative effect on a business (Marchewka; 2006). In business it is imperative to continuously monitoring risk as the environment is constantly changing. According to Cadle and Yeates (2008) the identification of risk will help a business to plan, prioritize and formulate responses to those risks that provide the greatest threat or opportunity for the business. Businesses must acknowledge that risk can be both internal and external while developing a risk management strategy. The following are some examples of risks that ‘Idea Box’ may encounter and ways to minimise to them.
Types of Risks
Ways to minimise risk
There is a risk of poor management within the business. There could be a lack of experience in the team.
To minimise this risk ‘Idea Box’ employees will go on training courses to enable them to be fully equipped with the relevant skills to ensure the business is successful.
As Idea Box is a new venture the business will need financial support. There is a risk of the company having problems acquiring a loan or getting investors to invest in the business.
To overcome this risk ‘Idea Box’ will produce a clear financial plan within the business plan that outlines the cash flow management. This will help to convince banks that the business can be a success. By having a clear plan will increase ‘Idea Box’ chances of receiving a loan. To interest investors the business will have PowerPoint present explaining the business idea. Also to ensure the business receives financial support the team will ask family and friends for help.
There is a risk of not giving beauty companies on board with our idea.
To minimise this risk the business will have meetings with different beauty companies explain to them the benefits on our business idea to their company.
There is a risk that there could be conflicts within the team.
To overcome conflicts within the team we will communicate regularly. Everyone will respect each other and share responsibility equally.
Competitors will pose a major risk to our business.
A solution to deal with this risk would be to constantly work hard for our business idea. We will continuously be creative and innovating so that competitors can’t drive us out of the market. ‘Idea Box’ will get to know their customers while provide outstanding customer service
Risk assessment - What are the risks/obstacles and how does the management intend to minimise those? What are the solutions?
It is important to have the right team when developing a business idea. All companies need a wide range of skilled people to be able to develop and grow within the business environment. ‘Idea Box’ team members are correct for this business idea as each member believes in the product and are very passionate for its success. Each member of the team will have different roles and responsibilities to ensure that all areas of the business are covered.
Sarah- Finance Manager- Sarah has always had a keen interest in finance from she was a child. She studied accounting in college and discovered that it was the perfect course for her. Sarah went on to study accounting and finance whilst at university. After university she worked at Barclay’s bank as an accountant for five years. With her experience from