65 business risks

8/19/2019 65 Business Risks

1/8

65 Business Risks (List)

Business is about taking risks. Nobody ever built a business by hiding in a

shell.

Risk is celebrated as the brave and alluring basis for economic progress. Butrisk has a dark side. s much as taking a risk is celebrated! nobody "ants

risks to be reali#ed.

$efinition% Risk risk is a chance of harm or loss.

Businesses "ant to take the risks that are most likely to achieve businessob&ectives and minimi#e non'essential risk. n other "ords! businesses seek

to manage and control risk . he follo"ing 65 risk categories represent the

most common types of business risks.

*trategic Risks

1. Corporate Governance Risk

he risk that insiders (employees) "on+t act in the best interests of o"ners

(stockholders) and the community.

2. Competitive Risk

he general risk that you+ll lose out to the competition.

3. Innovation Risk

he risk that the competition "ill out innovate you.

4. Intellectual Property Risk

Risk related to intellectual property (e.g. the risk that intellectual property

http://business.simplicable.com/business/new/what-risk-management-really-meanshttp://business.simplicable.com/business/new/innovation-guidehttp://business.simplicable.com/business/new/innovation-guidehttp://business.simplicable.com/business/new/what-risk-management-really-means


2/8

leaks to competitors).

5. Merger & c!uisition Risk

he risks related to integrating firms.". #usiness Risk

he risk that your overall business strategy and plan "ill be ineffective (e.g.

"ill fail to meet revenue targets).

$. %conomic Risk

he risk that the economy "ill go into recession. n some cases! recessions

benefit a business (inferior goods).

. 'ec(nological C(ange

he risk that technology investments "ill become obsolete.

). C(ange Management Risk

he risks associated "ith managing change.

1*. Pro+ect Risk

he risk that pro&ects "ill fail.

11. %t(ics Risk

he risk that your guiding principles and ethics "ill be breached.

12. Reputational Risk

he risk of damage to your corporate image. Reputational risk can reduce

trust in your business and lead to destruction of value.13. ,ustaina-ility Risk

he risk that you+ll fail to meet sustainability ob&ectives and targets.

,inancial Risks

http://management.simplicable.com/management/new/change-managementhttp://management.simplicable.com/management/new/project-riskhttp://management.simplicable.com/management/new/change-managementhttp://management.simplicable.com/management/new/project-risk


3/8

14. Proit Risk

he general risk that profits "ill fall.

15. Capital vaila-ility he risk that you "on+t be able to fund your business.

1". sset Risk

Risks related to asset prices (e.g. real estate).

1$. Interest Rate Risk

he risk that interest rates "ill change.

1. Currency Risk

he risk of a change in e-change rates against your favor. ,or e-ample! if

your costs are in * dollars but your revenue is mostly in /apanese yen 0

you "ant a strong yen.

1). Inlation Risk

he risk of price increases in critical inputs (e.g. energy for the transportation

industry).

2*. Investment Risk

he risk of a change in value of investments (e. g. 12uity 3 4ommodity

arket Risk).

21. /i!ui0ity Risk

he risk that you "on+t be able to sell an asset efficiently (e.g. 2uickly at afair price).

22. ,ystemic Risk

he risk that the entire global financial system or the financial system of a

country "ill collapse.


4/8

23. Concentration Risk

he risk of over'lending to a small number of debtors or investing in a

narro" selection of assets.24. Cre0it Risk

he risk that a borro"er "ill default on a debt.

25. rau0 Risk

he risk of fraud losses.

2". ccounting Risk

he risk of accounting errors.

2$. i0uciary #reac( Risk

he risk that your firm "ill breach its fiduciary duties (e.g. insider trading).

2. Counter Party Risk

4ounter party risk is the risk that other firms "ill break their contractual

obligations to you (e.g. an insurance company that goes bankrupt and can+t

pay you).

2). 'a Risk

he risk that your ta-es "ill increase or an audit "ill reassess ta-es of

previous years.

arketing 3 *ales Risks

3*. Revenue ,(ortall Risk

he general risk that revenue "ill fall short.

31. eman0 Risk

Lo"er than e-pected demand for your products.

http://business.simplicable.com/business/new/why-risk-management-failshttp://business.simplicable.com/business/new/why-risk-management-fails


5/8

32. Market Competition Risk

he risk that competitive forces "ill reduce revenue (e.g. a price "ar).

33. ,ales orecast Risk he risk that sales forecasts "ill be inaccurate.

34. e Pro0uct evelopment Risk

he risk that ne" products "ill fail on the market.

35. Customer Relations(ip Risk

he risk of damaged relationships "ill customers.

3". #ran0 6alue Risk

he risk of a decline in brand value.

3$. Pu-licity Risk

he risk of bad publicity.

3. /arge ccount Risk

he risk of losing a large customer.

3). /ocation Risk

he risk of choosing a bad location (e.g. a retail location).

perational Risks

4*. Inrastructure Risk

Risks related to infrastructure (e.g. electricity outage).

41. Maintenance Risk

Risk of maintenance failure (e.g. human error in aircraft maintenance).

42. Pro0uct ailure Risk

he risk that your product or services "ill fail.


6/8

43. Pro0uct /ia-ility Risk

he risk that you "ill incur legal liability related to your products and

services.44. 7perational 8uality Risk

he general risk of operational failures (e.g. your "ebsite goes do"n).

45. Pro0uction ,(ortall Risk

7ou fail to meet production targets.

4". /ogistics Risk

he risk of logistics failure. ,or e-ample! you fail to deliver goods to your

retail locations on time for customers.

4$. Procurement Risk

Risks related to procuring goods and services.

nformation echnology

4. rc(itectural Risk

he risk that your architecture "ill fail to meet business ob&ectives.

4). ata 8uality Risk

he risk of poor 2uality data.

5*. 'ec(nology 8uality Risk

he risk of soft"are and hard"are 2uality problems (e.g. failures! usability

issues).

51. Platorm Risk

he risk of choosing a technology platform that+s not fit for purpose.


7/8

52. Inormation ,ecurity Risk

he risk of information security incidents.

8R Risks

53. 9orkplace ,aety Risk

he risk that accidents or poor environment impacts the health of employees.

54. %mployer Reputation Risk

he risk that you+ll get a bad reputation as an employer and find it difficult to

recruit top talent.

55. %mployer /ia-ility Risk

he risk that you+ll be sued for employment related practices or incidents.

5". %mployment /a Compliance Risk

he risk of non'compliance "ith employment related la"s and regulations.

5$. 'alent Management Risk

he risk of losing top talent.

5. Compensation an0 #eneits Risk

he risk that compensation "ill be misappropriated (e.g. a manager overpays

her sister'in'la").

5). :iring Risk

he risk that you "ill hire the "rong candidate or violate recruiting ethics orla".

"*. %mployee Inormation Privacy Risk

http://simplicable.com/new/security-risk-vs-vulnerability-vs-threathttp://simplicable.com/new/security-risk-vs-vulnerability-vs-threat


8/8

he risk that you "ill leak personal information about your employees.

4ompliance 3 Legal Risks

"1. Compliance Risk

he risk that you "ill fail to comply "ith la"s and regulations.

"2. Man0atory Reporting Risk

he risk that you "ill fail to meet regulatory filling re2uirements.

"3. /ia-ility Risk

he risk of la"suits.

4atastrophic Risk

"4. orce Ma+eure

cts of nature! "ar and terrorism.

"5. Political Risk

Risk associated "ith political change.

65 business risks

Documents