Risk Management - Tea Shop Report free essay sample

I am going to establish a new tea shop business. There are five types of business risk that I might face. * Strategic Risks Are thoes risk associated with operating in my tea shop. They include risks arsing from: * Acquisition activity * Changes a mong customers or in demand * Research and development * Compliance Risk Compliance risk are those associated with the need to comply with laws and regulations. * Financial Risk Financial risk are associated with the financial structure of the business. The transactions the business makes, and the financial systems that already have in place. Examining daily financial operation. * Watching the cashflow * Employee risk management, such as maintaining sufficient staff numbers and cover, employee safety and up-to-date skills * Health and safety risks * Operational risks Operational riska are associated with my tea shop’s operational and administrative procedures. These include: * Recruitment * Supply chain * Accounting controls * IT sys tem * Internal rules, policies and procedure * Other risks * Environmental risks Being in business involves risks. We will write a custom essay sample on Risk Management Tea Shop Report or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Some you’ll be aware of, but there may also e others that have escaped your attention. 5 step will take the business to safeguard from outlined risks. 1) Identify sources of risk * These are the things you own or do that expose you to potential financial loss. * Damage to property owned by or rented to the business * Damage to other peoples property for which the business is legally responsible * Loss of income * Injury to an employee * Injury to another person for which the business is legally responsible 2) Estimate risk and potential losses In this step that estimate both the frequency and severity of losses that might occur. ) Decide how to handle risk There are several options you can use to handle each risk you identify. You can decide to avoid risk by not doing things that put you at risk. You can handle a risk by loss control, taking action to reduce either the frequency or the severity of losses that occur. You can transfer the risk by buying insurance or, finally, y ou can reduce the risk. Training employees in safety procedures and implementing standard operating procedures that reduce the risk of injury are good examples of risk reduction techniques. 4) Implement the Program Common action steps during this phase are buying insurance, starting loss control programs, and setting aside funds to cover expected retained losses. 5) Evaluate and adjust the program I should review my risk management plan as my business grows. Make sure that the risk management program keeps up so that my business is adequately protected from risk. While it’s important to insure my business against major business risks,first line of defence should always be risk management. The payoff for active planning and risk management is less risk of disruption to my business. Additional bonuses can include lower insurance premiums, better staff productivity and more credibility in the marketplace. SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues. SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors. Opportunities and threats are external factors. In SWOT, strengths and weaknesses are internal factors. A strength could be: †¢ Your specialist marketing expertise. †¢ The new, innovative product or service. †¢ Location of my business. Quality processes and procedures. †¢ adds value to my product or service. A weakness could be: †¢ Lack of marketing expertise. †¢ Undifferentiated products or services †¢ Location of your business. †¢ Poor quality goods or services. †¢ Damaged reputation. In SWOT, opportunities and threats are external factors. An opportunity could be: †¢ A developing market such as the Internet. †¢ Mergers, joint ventures or strategic alliances. †¢ Moving into new market segments that offer improved profits. †¢ A new international market. †¢ A market vacated by an ineffective competitor. A threat could be: †¢ A new competitor in your home market. Price wars with competitors. †¢ A competitor has a new, innovative product or service. †¢ Competitors have superior access to channels of distribution. †¢ Taxation is introduced on your product or service. How much risk is acceptable in your business? Justify your answer. A business owner is thoroughly responsible for their own financial survival and possibly the financial survival of their employees. Business owners, for the most part, seem to be risk takers, who really dont easily go with the flow. They are inventive and somewhat confident, as just having their own business does mandate that they possess these qualities. However, the ability to live with risk is very much a personal issue. Some business owners can live with more risk than others and some can manage the risk better than others. While all businesses must grow and change continually in order to survive, every time I makes a decision to expand or increase its offerings, a modicum of risk does exist. The tea shop face risks when it incorporate new offerings into my current ones, take on new employees, when change marketing techniques sufficiently, or when I expand into new areas of business above and beyond the general core or parent business. The old adage, Slow but steady, wins the race really applies significantly to business and appropriate risk management within a business. Business owners should plan thoroughly and weigh their risks completely before proceeding with any new venture or expansion. However, businesses also need planned growth throughout given periods. Business owners need to use their judgment wisely at all times, and use it well, when considering appropriate risk management techniques. Explain the benefits for your business. A cup of tea takes about five minutes. However, these 5 minutes a day can provide you with great health benefits. There are many past researches and on-going studies on the effects of tea on cancer prevention, cardiovascular health, and prevention of tooth decay. Although there was not any study that is 100% sure what are the benefits of tea, but all the researches concluded that different component in tea , especially the EGCG have positive effects on cancer cells and other organs such tooth, stomach, and skin. This is not pessimistic for tea because science is constantly changing. Different people do the experiment differently and reach different conclusions with different levels of confidence. Nevertheless, there are some conclusions that most of researches on teas all reached which will be listed later. These similar and encouraging conclusions are enough to say that drinking tea is good for you. The extent of goodness depends on individuals opinion. You can try it for a period of time and if you dont like it, you can change back to your old habit of soft drink and coffee. I understand tea is not for everyone, but you can never know until you try it. Reference: 1. http://ezinearticles. com/? Protect-Your-Business-Using-the-Risk-Management-Processid=5175355 2. http://www. nigeriansinamerica. com/vbulletin/showthread. php? t=2148 3. http://webcache. googleusercontent. com/search? hl=enq=cache:Zc77G01hDngJ 4. http://www. proboards. nl/data_docs/NSW-Risk_management_guide_small_business. pdf+benefits+of+risk+management+methods+for+small+businessct=clnk 5. http://ezinearticles. com/? The-Health-Benefits-From-A-Cup-Of-Teaid=697875