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Risk Analysis

Executive Summary

Business enterprise is subjected to risks that emanated from the various activities that the firm is engaging with the clients, the government, and the processes meant for profit generation. This report analyzes the risk possibilities and their respective likelihoods. For each risk, the consequences have been outlined and how each factor affects the business has been highlighted. Moreover, the risks have been prioritized based on the magnitude of the effects on the process of actual performance. The significant risks discussed in this report include the banking risks, manager’s travel hazards, and by-law compliance risk. The reports also give the risk analysis summary.

Risks Likelihood

The business is subjected to some risks that revolve around the daily activities of the firm (Young &Tippins, 2000). The venture is likely to suffer from losing the cash that is left in the store. The company may find it difficult to store the finance acquired during the day and in the case of late operation, the money will not be banked. In this case, the money will remain within the premises, which may be subjected to theft. Such occurrence is bound to take place after the first week of operation. The other factor that the business administration should consider is the security of the manager. The business manager is subjected to the travel risks since there exists a possibility of an attack leading to physical injuries. The manager may be attacked since the perception of the public could link the administrator to having the cash generated during the day. The business is also susceptible to non-compliance risks such as not meeting the water requirements and regulations. The water board noted that the company might be found to have neglected the water use compliance risks.

Risks Consequences

The risks that the business is subjected have several consequences. The banking risks are associated with the generation of possible loss of profit and increasing the cost of production that are not related to normal operation expenses (Culp, 2001). The money the business will risk losing could result to serious financial consequences such as the expenditures rising to more than 5,000 US Dollars. Businesses have been subjected to poor performance whenever they lose money through theft. The company operating too late hours encourages the possibility of cash remaining within the stores. Such actions support theft and the increased expenses for the business. When the manager is attacked during the late hours, then the administrator will be subjected to physical injuries that will affect the daily activities of the firm. The process of recovery will take time and the business will be submitted to managerial complexities such as the dragging of the business operations and delayed transactions. Moreover, the incompliance of the water regulatory measures might lead to the fines being imposed on the company, which is an additional expenditure. The organization’s reputation will be affected as well as the popularity of the brand will be decreased. The public image of a business plays a significant role in the success of the form since the customers are always attracted to an organization with a good public reputation.

Risk Management

Whenever a business is subjected to risks, it is important for the company to set up a strategy that will ensure that the mitigation measures are implemented. The move to mitigate the challenges assists the organization to reduce the effects of such risks in case they occur (Stokes & Wilson, 2006). There exist measures that could be undertaken to manage the possible risks of the business. The banking risks can be eliminated by considering shifting to the banking clients operating close to the firm. The enterprise should also consider developing the culture of the daily business to ensure that there is no cash to left in the store. In case the company operates with overnight cash holdings then they should be insured. The non-compliance risks can be reduced by setting up policies that will assist in water management. The business should consider installing native water systems, setting an emergency water tank to reduce overdependence on council water, fitting the dual flush toilets within the washrooms, and installing the water usage graphs within the staffroom. Concerning the manager travel risks the company should ensure that the boards meetings end early to avoid leaving the premises during late hours. The managers can also be provided with the freedom of leaving the meeting in case it is bound to extend beyond the agreed schedule. The board should consider the teleconferencing option to ensure that the security of the manager is guaranteed. Conducting the meetings in the morning will also reduce the chances of the managers leaving the business premises late.


In conclusion, the business operation is subjected to several risks such as banking, manager safety, and legal compliance. Each of the risks is subjected to associated consequences with implications that will tend to affect the business performance. The management should, therefore, consider setting up measures that would reduce the effect of the risks on the profit margin. The company should also consider being keen on the ethical practices such as compliance with laws and regulations. The management should ensure that adequate measures are set to build the reputation of the business as well as the activities that will assist in increasing the profit margin. It is necessary for organizations to prioritize the risks according to the effect they cause and generate a strategy to manage them.

Risk Prioritization Summary






By-Law Compliance Risk

Ruin the reputation of the firm

Fine charges

Managing the water usage system/approach

Installing water use graph in staffroom

Pre-settlement and opening week

Board Management

Manager’s Travel Risk

Physical injuries to manager

Managerial process of the business halted

Teleconferencing, meetings in the morning, time limit for meetings

Issuing of letter that will exempt managers on late meetings

Opening week and 3 months

Board of management

Banking Risk

Increased cost (greater than 5000 US Dollars)

Change the bank to one close to business, Insure overnight cash, Bank daily

Daily banking records

Opening week

Board of management


Culp, C. L. (2001). The risk management process: Business strategy and tactics. New York, NY:

Wiley, John & Sons.

Stokes, D. & Wilson, N. (2006). Small business management and entrepreneurship (5thed.).

London: Cengage Learning EMEA.

Young, P. C.&Tippins, S. C. (2000). Managing business risks: An organization-wide approach

to risk management. New York: American Management.