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How To Minimize Risks In A Business

Dr. Maria

November 19, 2008

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Risks taking have been over hyped a lot, exciting and are normally made for movie concepts. Sometimes it leads to bankruptcy or insolvency.

There are themes like grow to be a multi-millionaire before 25 year of age, overnight success, become rich in few days only etc. really increases the pulse rate of some people but also includes taking unnecessary risks.

A good business man work conscientiously towards minimizing the risks associated with business by knowing or studying every possibility vigilantly and investing in those ventures where he/she can get the surety of returns as well as no major risks are associated with it.

Businesses develop over time- which allows entrepreneur to earn his name in respect of quality, trust, longevity and reliability. In its premature ages the business does not have all of these – and thus get very few opportunities in its approach. It is not rare that startups are not profitable for 2- 3 yrs before they actually begin showing some handsome amount of money.

While thus broke for cash or earnings, it will not be wise to take such a risk or any untried stratagem from which it will be difficult to get recovered.

A business needs to make decisions constantly, but there is no need to make strategies again and again- if they are well thought earlier. Getting lost from the plan is also one of the huge reasons why businesses wind up taking unnecessary risks. For example Coco cola corp. sold coke like its make product which quite popular and liked by people through out the world.

It is the main earning or profit center for the company and also the brand name. But after introducing the New Coke in the market the company suffered an enormous loss the reason was actually straying from the strategy. Toyota Corporation is the biggest and most lucrative company around the globe. It has been more than 30 years the company is giving its 100% in building the unfailing cars on the planet.

The company is really working hard in fine tuning and refining their main products and also minimizing the threat by staying very close to their major business stratagem of building good and reliable. Now their market image is linked with dependability and they earn huge amount of profits.

They are focused, remain on their strategy and hence face squat risk. Marketing is also another part where you can minimize the risk which will help you to have a good control over the funds. The most successful kind of promotion is the one which is continuous, track able, and has the ability to give positive result in the end.

It is very easy to spend lot of money in the market and hoping that this will give you new orders in the future but that can lead to the bankruptcy of your company and you can become insolvent in near future. So think before you invest your money anywhere also see how much risks is associated with it.

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