Risk is a term given to anything that brings negative outcome possibility in any business. It can be damaging to any business and even threatens its survival. Therefore, it is important to be mindful of the various risks, to fully comprehend its potential impact on a business and to know how to handle it effectively.

This article provides you with principles on how you can minimize any risk.

This principles are:

Critical Planning;


Making an Hedging;

Be Discipline.


The following are what Critical Planning entails.

Feasibility studies: It is important to study the details about your business to know every side through which risk could rise.

Planning of Business: A good business plan gives enough detail of how, when and by whom the strategic goals will be achieved.

Cashflow projections: A number of company go into bankruptcy due to cashflow problems that could have been prevented. It is essential to make plan for anticipated cash in- and outflows and the timings thereof.

Financial planning: Outstanding financial planning covers many things including projected management accounts and the underlying ratios.


When companies examine risks they often forget about the most effective one which is human element. Whereas, it is the most fatal risk factors. Targeted relationships that are important include the following:

Suppliers: Good relationships with suppliers make business sense to negotiate good credit terms with suppliers.

Customers: Customers should be treated, always receive excellent service and be handled fairly and with respect.

Employees: It is noteworthy that company should be concerned with the progress being made as well as the wellbeing of their employees. Employees should also know about the mission of the company, as to go along in being an effective team.

Other Stakeholders: Relationships with all other stakeholders such as local government, governing bodies in the industry, service providers and others should also be kept in place.


The essence of making an hedge is to bypass any potential negative effect in business through an action, product, etc. Some of the ways you can hedge the operations of a business are given below:

Suppliers: Having an alternative supplier will serve as a good back-up.

Products. Reliance on few products is risky. Therefore, it is advisable for a  company to continually add new products to its offering.

Customers:  Company should avoid losing customers due to trust issues or other related cases.

Seasonality. Products and services offerings that meant for specified seasons have a very positive effect on cashflows and minimise the potential risks associated with it.

ICT:  Technology is a crucial equipment. Limited  companies can survive without proper information and communication technology.

Financial: Financial risk management is very common in large international businesses. If you sell your products in the international arena, you’re going into higher risky scale because there are many products available to hedge the various risks.


Being discipline can reduce risks in all aspect of business. Discipline should be applied to all aspects discussed above.


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