Running a business is also not a child’s play. How we deal with failure determines whether or not it ultimately leads to success. Companies can substantially reduce the risk of equipment failure by combining regular, properly conducted equipment inspections with a maintenance program that includes preventative and predictive maintenance in addition to reactive maintenance. When evaluating your business risk exposures, name your biggest nightmare. Failure is a part of life, and that includes business failures. As a business owner, you can reduce your business continuity risks … Another big risk that a business faces is the failure to make enough money to survive and being forced to close. Owning a business can be rewarding and at the same time very stressful and risky. Failure … 1) Indeed, robust communication skills for a risk manager are essential and can be the sole reason for risk management failure. Even with the benefit of great planning, a robust business case and effective risk assessments in place, many projects can quickly reach the limits of the ‘comfort success zone’ and begin to experience failure. We can learn a lot from successful business owners of the past, such as Colonel David Sanders , the founder of KFC (Kentucky Fried Chicken). (I discussed this in my post on the qualities of a risk manager .) What’s the worst that could happen in your business or organization? All these and more can cause major losses. Risk mitigation is the process of taking steps to reduce exposure to adverse effects, such as, business failure. Images courtesy of U.S. Army Corps of Engineers, Creative Commons. Forecast and evaluate business risk exposures to manage future loss. His new book, Entrepreneur's Guide to Financial Statements, has been called "Mandatory Reading for Small Business Owners".David's tips and tricks for running a more profitable small business can be found here and on his business blog, www.FuseFinancialPartners.com. David Worrell is a serial entrepreneur, consulting CFO and financial analyst. Reducing the risk of failure in new product development Project delays, cost overruns, misalignment with company strategy – these are just some of the things that can go wrong with new product development and they are often directly attributable to … Project management professionals who take aggressive approaches to risk management can actually strengthen their teams and their results. When executed well, pilots are a valuable activity and greatly reduce the risks associated with production system rollouts. There are certain factors that can cause business failure but lack of proper research for a profitable market before venturing is one of the main causes of business failure. Reasons that may call for execution of an exit strategy include: the company has (or has not) reached a certain milestone, such as, profit margin; No business owner wants this to happen as it would lead to many other problems such as loss of revenue, loss of key employees, loss of customers and suppliers, and loss of market leadership. Risk management isn't just theory: Strong risk management plans can be used to help plan ahead and prevent project failure. A fire, a lawsuit, death of a key executive, employee theft, reputation failure…. Successful companies mitigate their risk with a carefully planned exit strategy. Contingent business interruption insurance is designed to protect against disruptions caused by events affecting a vendor. 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