Production and commercial activities always carry certain risks. Of course, the head, the entrepreneur is responsible for the decisions made. Therefore, it is always necessary to consider the saving of financial and material resources. Very carefully, calculations should be made for projects and transactions. This rule is especially relevant during the period of financial crisis, high inflation, large loans.
Entrepreneurial risk is ...
With errors in calculations, management decisions, the developed projects do not bring profit, on the contrary, the company incurs losses. Such a result of activity is an entrepreneurial risk. It can be divided into three components: investment, financial and production.
Entrepreneurial risk is errors, the consequences of which are expressed:
- at a complete stop of the enterprise;
- non-receipt of raw materials for production;
- at risk of unrealized or incomplete sales of manufactured products (unclaimed services);
- untimely or complete non-receipt of funds from product distributors;
- at risk of returning manufactured and sold products;
- at risk of non-compliance with loan, investment and loan agreements;
- in bankruptcy of both the institution itself, the company, the company, and its partners,suppliers.
Types of business risks
The classics of basic science are based on many attributes. But entrepreneurial risk is a concept that requires the most accurate determination of its types. Therefore, three types of risks are considered to be thorough. These include:
- entrepreneurial;
- creditor;
- monetary.
Entrepreneurial risk is the risk of circumstances that terminate the operation of the enterprise if personal funds (finances) are invested.
Credit risk is the risk of non-repayment of borrowed funds. Such a situation may arise as a result of the bankruptcy of the borrower, both intentional and involuntary.
Cash risk is the risk of a depreciation of the money supply. That is, lending is always more profitable than tangible assets.
Entrepreneurial risk is a direct correlation of profit margin. For example, when purchasing short-term bonds, one should not rely on the rapid growth of capital. On the contrary, a common stock with the smallest degree of security is highly capitalized.
Area of entrepreneurial risk
In order to develop ways to get out of bankruptcy of one degree or another, to manage entrepreneurial risks, it is necessary to understand what area of risk the enterprise is in. They are usually divided into four main ones:
- risk-free;
- acceptable risk;
- crisis;
- disaster.
The first area is characterized by the absence of losses, operations bring normative profit, and there is no borrowed capital.
The second area assumes that losses are tolerable in comparison with profit, the company's activities remain appropriate both in the market and financial sense.
Third, expected losses exceed potential profits. Entrepreneurship leads to bankruptcy.
Area of disaster. The name speaks for itself. Losses exceed the crisis level and make up the value of the enterprise itself.