The document discusses different types of risks that businesses face including economic risks from factors like competitors or regulations, natural risks from disasters, and human risks from errors or unpredictable behavior. It defines risk management as actions to prevent or reduce loss, which can include avoiding, assuming, or transferring risk. The document recommends businesses identify risks, develop a risk management plan including roles and procedures, and communicate the plan to employees. It provides examples of risks from theft, robbery, fraud, and bounced checks and ways businesses can help prevent losses from these risks.

2. What is risk?
 Risk is the possibility of some kind of loss. Or
The chance that an investment’s
actual return will be different than expected.
Risks can be categorized as human risk,
natural risk, and economic risk.

3. Risk Management:
 Risk management is taking action to prevent
or reduce the possibility of loss to your
business. Or the systematic process of
managing risk to achieve your business
objective.You can avoid risk, assume risk, or
transfer risk.
 Risk cannot be totally eliminated, but it can be
reduce and managed.

4. Identifying Risks:
 Economics Risk
 Natural Risk
 Human Risk

5. Economic Risks
 These risks occur from changes in
overall business conditions.
 This can include:
 amount or type of competitor(s)
 changing consumer lifestyle
 population changes
 government regulations
 inflation
 recession

6. Natural Risks
Natural risks are result from natural disasters
or disruptions
 floods
 tornadoes
 hurricanes
 fires
 droughts
 lightning
 earthquakes
 even sudden abnormal weather conditions

7. Human Risks
These are caused by human mistakes and errors,
as well as the unpredictability of customers,
employees, or the work environment
This could include:
 Theft
 injury on the job
 bad checks
 employee error
 Negligence
 Incompetence
 etc.

8. Preparing to Face Risks
 When dealing with risk, choices you
have include
 avoid the risk
 assume the risk
 transfer the risk

9.  Determine What Can Go Wrong
– risk assessment
• looking at all aspects of your business and
determining the risks you face
o During this assessment, you should:
• Learn the risks your business faces.
• Decide how the risks would affect your business.

10.  Develop a Plan
 Chain-of-command information, including names and
job titles of the people responsible for making decisions.
 The names of individuals responsible for assessing the
degree of risk
 Preferred method for reporting fires and other
emergencies
 Specific instructions for shutting down equipment and
other business activities and procedures
 Facility evacuation procedures, including maps showing
the best and alternate exit routes
 Specific training for those who are responsible for
responding to emergencies.

11.  Develop a recovery plan.
 Communicate Your Plan
– communicate plans to personnel
– delegate responsibilities

12.  Types of Theft
• shoplifting
– the act of knowingly taking items from a
business without paying
• Consumers shoplift millions of dollars in
merchandise annually.

13. Employee Theft
– To stop theft, take the following precautions:
• Do not hire dishonest employees.
• Install supervision systems.
• Establish a tough company policy regarding theft.
• Be on the lookout.

14. Robbery
– Most businesses are weak to robberies.
– Prevent from robberies by using:
• dead-bolt locks
• burglar alarms
• surveillance cameras
• Credit Card Fraud
– electronic credit authorizer

15. Bounced Checks
– bounced check
• a check returned to a business by the bank because
the check writer’s checking account had
insufficient funds to cover the check amount
– prevention options
• accept only in-state checks
• charge customers a fee for bounced checks
• ask for identification
• refuse to accept checks

16. Thanks