Identification and Explanation of Potential Risks
The business may face various risks, which can be categorized into internal and external factors. Below is a detailed explanation of these potential risks:
Internal Factors
- Operational Risks: These include risks related to the day-to-day operations of the business, such as equipment failure, supply chain disruptions, and human errors.
- Financial Risks: These involve risks related to the financial health of the business, such as cash flow issues, high levels of debt, and poor financial management.
- Compliance Risks: These are risks associated with failing to comply with laws, regulations, and industry standards, which can result in legal penalties and reputational damage.
- Strategic Risks: These include risks related to the business’s strategic decisions, such as entering new markets, launching new products, or changes in business models.
External Factors
- Market Risks: These involve risks related to changes in the market environment, such as shifts in consumer preferences, increased competition, and economic downturns.
- Technological Risks: These are risks associated with technological advancements and changes, such as cybersecurity threats, data breaches, and the need for continuous innovation.
- Environmental Risks: These include risks related to environmental factors, such as natural disasters, climate change, and regulatory changes related to environmental protection.
- Political and Legal Risks: These are risks associated with changes in political and legal environments, such as changes in government policies, trade restrictions, and legal disputes.
