Wednesday, September 12, 2007
Risk Management Franchise Business
In business, as in everything else, there exists a degree of risk that all of us are exposed to. In the case of the entrepreneur or the businessman, the risk is the possibility of incurring a loss from you investments. The possibility of a bad outcome is what keeps many of potential entrepreneurs in the sidelines, afraid of taking the risk of investing money in a franchise business that may or may not be profitable in the future. But there are certain measures that we can take to minimize the risk present all around and this is called risk management.
Risk management requires careful planning of the factors that may affect your business. Conducting feasibility studies and noticing the latest trends before starting is the most important step, identifying the risks before sinking any money into a venture is the wisest move you will ever make. I have a couple of friends who partnered up went right ahead and opened up a store because of perceived profitability and hearsay from relatives that this particular business is great without them actually doing any research into the viability of the business encountered lots of problems and they are now thinking of closing up shop.
But there are some things no matter how hard you try to prepare for remain very much unpredictable like our political landscape, advances in technology that may render our products or services obsolete and other fortuitous events that may come our way. We may not prevent these events from occurring, but with risk management we can minimize the losses that may arise. While a less prepared business owner might already be stressed out of his mind figuring out how to get out of the quagmire, a more prepared businessman who has taken into account all the risk involved may already have a contingency plan in place.