External risks associated with business activities

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We are talking about situations that do not have a direct impact on the company's activities, but still affect its work. The main difficulty is that they can be foreseen, but practically impossible to influence. The most significant risks include:

sudden changes in legislation;

instability of the political situation;

fluctuations in fuel and raw material christian churches email list prices;

economic crises in a country or a specific industry;

natural disasters;

environmental disasters;

social unrest, wars and epidemics.

In addition, the organization's business risks may be related to competitors' actions, lack of quality resources, high inflation, and other factors. For the stable operation of the enterprise, it is necessary to take into account most of these threats and have backup plans in case of crises in order to minimize losses and maintain business sustainability.

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Regulation of business risks
It is established by law that starting a business is a free and conscious choice of a person. There are no special laws that would protect entrepreneurs from economic fluctuations or political instability. In difficult situations, the government can take temporary measures to help small and medium-sized enterprises cope with crises.

Regulation of business risks

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One of the ways to protect a business is Law No. 4015-1 "On the Organization of Insurance Business in the Russian Federation", which allows entrepreneurs to insure their companies against unexpected losses. Insurance companies offer services that can protect against unscrupulous partners, equipment breakdowns, falling demand, and even bankruptcy.

However, it is impossible to insure business risks associated with losses from the purchase of raw materials, production stoppages or tax payments.

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How to predict business risks
Business risks are divided into certain and uncertain depending on how predictable they are. With certain risks, the company has information to analyze, such as data from accounting reports or contracts with partners. Uncertain risks, on the contrary, are associated with a lack of information.

It is possible to forecast certain business risks by identifying signs of a crisis. In this way, management can understand how to minimize losses. The success of forecasting depends on the knowledge and experience of the entrepreneur, accountants and lawyers.

Uncertain risks require long-term planning from management in the early stages of business. It is important to identify the most likely risks in your area and develop a plan of action in case they occur.


How to minimize risks
To avoid negative consequences and take timely measures, it is important to regularly assess the level of business risks. This means that you need to constantly analyze transactions, conditions, the financial condition of the company and external factors.

There are several ways to minimize risks:

Diversification allows an entrepreneur to open a new business in another area with little investment. For example, if the demand for a bookstore is too low, the management can open a coffee shop in the same premises.

Hedging is a way to protect against price risks. For example, a sole proprietor might enter into a contract to supply spare parts for a year at a fixed price to avoid price increases.

Limiting involves setting maximum limits for expenses, loans or investments, which helps control finances and reduce the business risks of the enterprise.