You know very well that the business world is dynamic. How do you manage risks and uncertainties? The future is uncertain and what seemed to work very well yesterday is not a guarantee that it will work today. Things change at any time and changes can bring opportunities or miseries in a business.
Planning alone cannot completely free us from risk. Some entrepreneurs are wrong to say that if they plan well, their businesses are completely protected from the risk of uncertainty. Of course, there are some losses that you cannot control. I’m not telling you not to plan. Lack of planning will lead to aimless operation of your business. Have a plan for your business to avoid tomorrow’s crisis and also to know where you want your business to be.
Today’s markets are full of pushy sellers vying to outdo their competitors. If you are not attentive to what your competitors are doing in the market, you risk losing customers.
Although you realize the losses caused by risks in your business, the good news is that you can mitigate them. There are several ways to prevent risks from ruining your business. You probably know.
You realize that the marketing process you undertake every day involves risk of uncertainty. If a loss occurs in the course of executing your marketing process, then it denies you the profit you expected after selling your products.
Three types of risks
IN.) Changes in Market Conditions
The change in market conditions results from fluctuations in market prices. The fluctuation in the market is caused by three factors, namely; time, place and competition. Let’s analyze each factor in detail.
1.) Time factor
Time plays an important role in influencing prices in the markets. If not managed well, it can lead to losses. Producers can make products in large quantities in anticipation that the price will increase. Wholesalers and retailers stock these products in large quantities just as far in advance. But later, the expected price increase does not occur in the market.
2.) Place Factor
It occurs when different prices prevail for the same products and services in different markets at the same time. You buy products from a market only to be forced to sell them at a lower price on the selling market, thus incurring a loss.
3.) Competition factor
This translates to losses if you don’t keep up with the competition in the market. You need to be alert about what your competitors are doing in the market to influence the sales of your business.
b.) Natural causes
This type of uncertainty risk is out of your control. Are you able to control earthquakes, fires, storms and hurricane winds? It is impossible and only God is capable. But he can mitigate the losses that arise from this type of uncertainty risk.
vs.) human behaviors
These are the risks you create in your business. You are absolutely responsible for them. Since you are the creator, you can control what happens. Bad debts, shoplifting, and robberies are examples of this type of uncertain risk.
