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65 Business Risks (List)

        posted by , June 27, 2016

Business is about taking risks. Nobody ever built a business by hiding in a shell.

Risk is celebrated as the brave and alluring basis for economic progress. But risk has a dark side. As much as taking a risk is celebrated, nobody wants risks to be realized.

Definition: Risk
A risk is a chance of harm or loss.

Businesses want to take the risks that are most likely to achieve business objectives and minimize non-essential risk.

In other words, businesses seek to manage and control risk. The following 65 risk categories represent the most common types of business risks.


Strategic Risks

1. Corporate Governance Risk
The risk that insiders (employees) won't act in the best interests of owners (stockholders) and the community.

2. Competitive Risk
The general risk that you'll lose out to the competition.

3. Innovation Risk
The risk that the competition will out innovate you.

4. Intellectual Property Risk
Risk related to intellectual property (e.g. the risk that intellectual property leaks to competitors).

5. Merger & Acquisition Risk
The risks related to integrating firms.

6. Business Risk
The risk that your overall business strategy and plan will be ineffective (e.g. will fail to meet revenue targets).

7. Economic Risk
The risk that the economy will go into recession. In some cases, recessions benefit a business (inferior goods).

8. Technological Change
The risk that technology investments will become obsolete.

9. Change Management Risk
The risks associated with managing change.

10. Project Risk
The risk that projects will fail.

11. Ethics Risk
The risk that your guiding principles and ethics will be breached.

12. Reputational Risk
The risk of damage to your corporate image. Reputational risk can reduce trust in your business and lead to destruction of value.

13. Sustainability Risk
The risk that you'll fail to meet sustainability objectives and targets.


Financial Risks

14. Profit Risk
The general risk that profits will fall.

15. Capital Availability
The risk that you won't be able to fund your business.

16. Asset Risk
Risks related to asset prices (e.g. real estate).

17. Interest Rate Risk
The risk that interest rates will change.

18. Currency Risk
The risk of a change in exchange rates against your favor. For example, if your costs are in US dollars but your revenue is mostly in Japanese yen — you want a strong yen.

19. Inflation Risk
The risk of price increases in critical inputs (e.g. energy for the transportation industry).

20. Investment Risk
The risk of a change in value of investments (e. g. Equity & Commodity Market Risk).

21. Liquidity Risk
The risk that you won't be able to sell an asset efficiently (e.g. quickly at a fair price).

22. Systemic Risk
The risk that the entire global financial system or the financial system of a country will collapse.

23. Concentration Risk
The risk of over-lending to a small number of debtors or investing in a narrow selection of assets.

24. Credit Risk
The risk that a borrower will default on a debt.

25. Fraud Risk
The risk of fraud losses.

26. Accounting Risk
The risk of accounting errors.

27. Fiduciary Breach Risk
The risk that your firm will breach its fiduciary duties (e.g. insider trading).

28. Counter Party Risk
Counter party risk is the risk that other firms will break their contractual obligations to you (e.g. an insurance company that goes bankrupt and can't pay you).

counterparty risk

29. Tax Risk
The risk that your taxes will increase or an audit will reassess taxes of previous years.


Marketing & Sales Risks

30. Revenue Shortfall Risk
The general risk that revenue will fall short.

31. Demand Risk
Lower than expected demand for your products.

32. Market Competition Risk
The risk that competitive forces will reduce revenue (e.g. a price war).

33. Sales Forecast Risk
The risk that sales forecasts will be inaccurate.

34. New Product Development Risk
The risk that new products will fail on the market.

35. Customer Relationship Risk
The risk of damaged relationships will customers.

36. Brand Value Risk
The risk of a decline in brand value.

37. Publicity Risk
The risk of bad publicity.

38. Large Account Risk
The risk of losing a large customer.

39. Location Risk
The risk of choosing a bad location (e.g. a retail location).


Operational Risks

40. Infrastructure Risk
Risks related to infrastructure (e.g. electricity outage).

41. Maintenance Risk
Risk of maintenance failure (e.g. human error in aircraft maintenance).

42. Product Failure Risk
The risk that your product or services will fail.

43. Product Liability Risk
The risk that you will incur legal liability related to your products and services.

44. Operational Quality Risk
The general risk of operational failures (e.g. your website goes down).

45. Production Shortfall Risk
You fail to meet production targets.

46. Logistics Risk
The risk of logistics failure. For example, you fail to deliver goods to your retail locations on time for customers.

47. Procurement Risk
Risks related to procuring goods and services.


Information Technology

48. Architectural Risk
The risk that your architecture will fail to meet business objectives.

49. Data Quality Risk
The risk of poor quality data.

50. Technology Quality Risk
The risk of software and hardware quality problems (e.g. failures, usability issues).

51. Platform Risk
The risk of choosing a technology platform that's not fit for purpose.

52. Information Security Risk
The risk of information security incidents.


HR Risks

53. Workplace Safety Risk
The risk that accidents or poor environment impacts the health of employees.

54. Employer Reputation Risk
The risk that you'll get a bad reputation as an employer and find it difficult to recruit top talent.

55. Employer Liability Risk
The risk that you'll be sued for employment related practices or incidents.

56. Employment Law Compliance Risk
The risk of non-compliance with employment related laws and regulations.

57. Talent Management Risk
The risk of losing top talent.

58. Compensation and Benefits Risk
The risk that compensation will be misappropriated (e.g. a manager overpays her sister-in-law).

59. Hiring Risk
The risk that you will hire the wrong candidate or violate recruiting ethics or law.

60. Employee Information Privacy Risk
The risk that you will leak personal information about your employees.


Compliance & Legal Risks

61. Compliance Risk
The risk that you will fail to comply with laws and regulations.

62. Mandatory Reporting Risk
The risk that you will fail to meet regulatory filling requirements.

63. Liability Risk
The risk of lawsuits.


Catastrophic Risk

64. Force Majeure
Acts of nature, war and terrorism.

65. Political Risk
Risk associated with political change.


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