Risk Analysis Templates
Before understanding the Risk Analysis market practices, it is important to know what risk is. Risk is nothing but the uncertainty. It can be in life, in doing business, in a casino etc. When it comes to life, we know that there is no risk of death because that is a certain event. But if we talk about business, risk can result in heavy losses even shutting the doors of the company permanently. This in no way means that you stop your businesses or fear the risk. There are techniques to analyse the risk and manage risks. Many experts have proved that a proper Risk Analysis can result in proper estimates of financial figures. Hence, risk is the probability of something going in the wrong direction and the after effects of the same.
You can read about some Risk Analysis market practices here.
The risk can be a financial risk or a business risk. Usually business risks are calculated first and this is done by both financial and marketing analyst. But financial risk can only be analysed by finance experts.
Identification of Threats
Identify the threats involved or what can act as a threat to your business. These can be categorized as: operational, project based, procedural (process involved), human risks (errors), financial (interest rates, stock market fluctuations), technical (technology failure, up-gradation), political (policies, tax regimes), structural and natural (disaster, calamities).
Identify the strengths, weakness, opportunities and the threats involved in your business. This involves a rigorous process as you need to analyze the market, your own company, product, competitors, and government regimes for Risk Analysis as a whole.
Estimation of Risk
Once you are done with the above steps, make sure that you calculate the risk involved. This gives an approximate estimation of the risk factor. Risk value is usually calculated by considering the probability of event and the cost of event (multiplication of the two).
After the Risk Analysis, it is must that you manage these risks. Then only the complete procedure will help in reducing risk and its effects. To manage risks, try to choose cost effective approaches and where ever possible, avoid risk. Although it is said that high risk gives high returns but do not forget that if they go in the opposite direction, it will land you and your business in huge losses.
Try controlling the risk if it comes at some point of time by using preventive and defensive techniques for your business. Always have back up options ready in such kind of worse situations.
Thus, Risk Analysis is an important tool in saving your business from deep deaths and threats. When analyzed properly in sequence and managed at the same time, it proves useful for many big companies. The recession of 2007-08 has left its after effects that many companies are still facing it today. Why? Improper Risk Analysis and mismanagement! It is therefore said that hope for the best but be prepared for the worst. Uncertainties are always unexpected and don’t knock your door.
Free Risk Analysis Templates
Here are previews and download links for these free Risk Analysis Templates.