Weekly Task - Topic 3

What do you understand the good concept and tools for risk management? How to manage risk as an entrepreneur?

 

Luven - The concept "risk management" refers to identifying issues that may occur, analyzing and controlling these hazards which are called risks that are present at hand (Andeles, 2024). This strategy is commonly used in companies whereby there are parties at stake who expect to be in a safe guaranteed environment, such as shareholders, employees and customers. It is done by placing down appropriate safety measures and prioritising its implementation based on how long there is left (Andeles, 2024). An effective risk management would be able to reduce the likeliness of the risk to happen, and its potential damage.

              The tools involved in order to implement risk management include the SWOT Analysis that stand for Strengths, Weaknesses, Opportunities and Threats. This analysis is used for many domains, and also comes in handy for risk management as it requires brainstorming of these four aspects, to identify the risks that may threaten a company. Another tool is the Root Cause Analysis, which only treats risk after it has arise, and then addressing the cause of this issue, followed by resolving it (Brown, 2023). This tool is similarly to an individual learning from their mistakes, ensuring it does not happen again in the future.

               In order to manage risks as an entrepreneur, the risk is measured and entrepreneurs would have to make calculated moves. The risk would be mitigated step-by-step, slow but steady progress to ensure they do not lose out if the strategy fails. If it does not work out as expected, entrepreneurs should have their alternative plan ready to be executed to take on the risk (Gothi, 2021). {265 words}

Chong - The process of recognizing, evaluating, and mitigating risks to an organization's assets, profits, and operations is known as risk management . It involves identifying potential threats, assessing their likelihood and impact, and implementing strategies to minimize their negative effects. Effective risk management is essential for ensuring the long-term success and sustainability of a business. These risks can arise from a number of different things, such as unforeseen financial circumstances, legal obligations, technological problems, poor strategic management, mishaps, and natural disasters. 

             An effective risk management program aids in an organization's consideration of all the dangers it may encounter. It helps in developing strategies to minimize the impact of these risks and ensure the organization can continue to operate smoothly. By identifying potential threats and implementing preventive measures, risk management enhances the overall resilience and sustainability of the organization. The relationship between various business risks and the potential domino effect they may have on an organization's strategic objectives is another topic covered by risk management (Tucci & Stedman, 2023b).

             As an entrepreneur, it's crucial to understand the different types of risks that come with starting and running a business. There are several categories of risks that entrepreneurs face, including financial, operational, legal, market and industry, and reputational risks, to name a few. Each type of risk presents unique challenges and requires a tailored approach to mitigate them (Team & Team, 2023b). {226 words}

Nareen - What is risk management? It is the process of recognising, evaluating, and mitigating risks to an organization's assets, profits, and operations is known as risk management. These risks can arise from a number of different things, such as unforeseen financial circumstances, legal obligations, technological problems, poor strategic management, mishaps, and natural disasters (Tucci & Stedman, 2023).

            One of the good tools to help manage risk is using the SWOT Analysis, which stands for Strengths, Weaknesses, Opportunities and Threats. After gathering SWOT data, we may use a four-square grid to display our results. There are weaknesses to the right and strengths to the left at the top of the square. Threats to the right and opportunities to the left are located below that. The things on the left are beneficial to accomplishing the project's goal, while the things on the right are detrimental to doing so. Cross-referencing and analysis are thus made possible (Malsam, 2024).

               Managing risk as an entrepreneur involves many steps. Entrepreneurs encounter various risks across financial, operational, legal, and market domains. It's crucial for them to develop a solid risk management plan that addresses these areas. Conducting thorough risk assessments helps in prioritizing mitigation efforts, while proactive identification of risk factors through methods like data analysis and expert consultation is vital for effective risk management (Team, 2023). {220 words}

 

Naviin- As an entrepreneur, risk management is essential in avoiding huge and recurring financial losses in a business. Risk management is done by a continuous activity of analyzing and identifying risks that may occur and followed by monitoring it (Marquette University, n.d.). Risk management can be done in various ways and in different fields. For instance, in IT sector, risk management can be done by having backups of files and database or even high level of encryptions to avoid loss of important data. As for in business, avoiding risks is important as well.

One of the tools for risk management is to conduct root cause analysis. According to (Malsam, 2024), root cause analysis rather tackles on the problems that already happened in the past and analyzing why, how and what happened. These steps ultimately results in identifying the main cause of the problem and avoiding and preventing it in the future. Besides that, brainstorming is also a technique of risk management. It primarily involves predicting and analyzing risks that occurred in similar projects that may potentially occur in the current project and finding ways to prevent it. 

As an entrepreneur, I would purchase necessary insurances and take appropriate measures while handling large sums of investments. [204 words]

Sze Jay - Risk management is often thought as mitigation of uncertainty in the market (Krach, 2023). As a entrepreneur, they should understand that they must be willing to take a risk in pursuit of potential profits. However, they entrepreneurs should also know that some risks are inevitable and should be well managed for the long term of the business.

          According to Krach, one of the way to manage risk well is to understand that risk is an opportunity for the business. The earliest stages of a new business idea, risk and opportunity are link and cannot be separated. Entrepreneurs can compare their personal goals with the possible chances to enter the market. Before starting a new business, entrepreneurs should conduct primary research. By doing primary research they can understand the market well before starting their business. This could well reduce the risk of failed business.

             Other than that, when encountering risks that needs high cost to eliminate, entrepreneurs can choose to reduce the risk by introducing new safety measurer or eliminate the risk by changing the way of the production (InfoEntreprenuers, n.d.). As risk management is not an one-off problems, entrepreneur shall continuously monitoring an reviewing risk management approach for a success business. {201 words}

References
- Andeles, J. (2024, March 31). Risk Assessment: Process, Examples, & Tools. SafetyCulture. https://safetyculture.com/topics/risk-assessment
- Brown, L. (2023, December 31). Risk Management Tools & Techniques in Project Management. Invensis. https://www.invensislearning.com/blog/risk-management-tools-techniques-in-pm
- Gothi, C. (2021, January 21). 5 Effective Ways Entrepreneurs Can Manage Risk. IRM India Affiliate. https://www.theirmindia.org/blog/5-effective-ways-entrepreneurs-can-manage-risk
- Team, A. (2023, February 1). How to manage risk as an entrepreneur. AIContentfy. https://aicontentfy.com/en/blog/how-to-manage-risk-as-entrepreneur
- Tucci, L., & Stedman, C. (2023, September 11). What is risk management and why is it important? Security. https://www.techtarget.com/searchsecurity/definition/What-is-risk-management-and-why-is-it-important
- Malsam, W. (2024, January 24). The best risk management Tools & Techniques for PM pros. ProjectManager. https://www.projectmanager.com/blog/risk-management-tools-techniques
-Krach, K. (2023, March 27). 4 ways entrepreneurs can manage risk. Forbes. https://www.forbes.com/sites/keithkrach/2023/03/24/4-ways-entrepreneurs-can-manage-risk/?sh=6de6c5751751
-Manage risk. (n.d.). https://www.infoentrepreneurs.org/en/guides/manage-risk/