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A business risk is a circumstance or factor that may have a negative impact on the operation or profitability … a given company. Sometimes referred to as company risk, a business risk can be the result of internal conditions, as well as some external factors that may be evident … the wider business community.
When it comes to outside factors that can create an element … business risk, one of the most predominant risks is that of a change in demand … the goods and services produced … the company. If the change is a positive one, and the demand … the offerings of the company increases, the amount of risk is decreased a great deal. However, if consumers demand for the offerings decreases, either due to loss of business to competitors or a change in general economic condition, the amount of risk involved to investors will increase significantly. When a company’s risk factor is considered to be increased due to outside factors that are beyond the control … the company to correct, chances … attracting new investors is severely limited.
Internal factors may also result … the development of significant business risk for the investor. Often, these are factors that can be identified and corrected. If flagging sales can be attributed to an … ineffectual marketing effort or a sales force that is not performing up to expectations, making changes in the marketing approach or restructuring the sales effort will often result in minimizing the perception of business risk … the part of potential investors. The same is true if a company’s manufacturing facilities are not operating … optimum efficiency. Revamping the operational structure of the plants and facilities will decrease the element of business risk and … result in higher profits … the same level of production and sales, which will in turn make the company more attractive to potential investors.
In general, any investor will consider the relationship … a company’s securities and the business risk associated with the company before choosing to invest in the future of the corporation. While there is an element of business risk associated … any corporate operation, proper … management will result in creating a balance between assets and securities that will keep the degree of business risk attractive to individuals and entities that consider investing funds … the operation.
Дата публикования: 2014-12-25; Прочитано: 226 | Нарушение авторского права страницы | Мы поможем в написании вашей работы!