The risks you face in business are driven by a range of internal and external factors. Of course, some of these factors are within your control, but others may be harder to manage because of outside influences.
Processes and procedures
Risks caused by internal factors usually relate to the decision-making processes and procedures already in place within an organization. For instance, if your business has inadequate technical support, you risk losing customers who don’t get the help they feel they need.
Maybe the internal factors you face relate to investment decisions and HR management. Or your business may risk losing market share because it decided not to invest more in research and development.
External factors, on the other hand, are linked to forces outside your organization’s control. Volatile markets and fluctuations in exchange rates — both of which may increase the cost of importing supplies — are typical examples.
If you’ve ever had to cancel an event due to rain or snow, you’ve experienced the external risk factor of natural events. Increased competition and new regulations can also pose a risk to your organization.
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