Business risks can lower profits or cause losses and are influenced by factors like sales, prices, costs, competition, the economy, and regulations. There are four main types of business risks: physical risks, location risks, human risks, and technology risks. Risks must be identified and prioritized based on their probability of occurrence, such as very likely or small chance. Managing risks involves identifying threats, assessing vulnerabilities, determining expected risks, identifying ways to reduce risks, and prioritizing reductions based on strategy.

1. IDENTIFYING AND
MANAGING BUSINESS
RISKS

3.  The possibility that a company will have
lower than anticipated profits, or that it
will experience a loss rather than a profit
is known as a Business Risk. Business
risk is influenced by numerous factors,
including sales volume, per-unit price,
input costs, competition, overall
economic climate and government
regulations.

4. 1. Physical Risks for example building risks
and hazardous material spills.
2. Location Risks such as nearby fires, storm
damage, tornados, earthquakes, etc.
3. Human Risks such as alcoholism and drug
abuse and,
4. Technology risks like power outage.

5.  After the risks have been identified, they
must be prioritized in accordance with the
assessment of their probability.
 For example, the risks can be prioritized on
the basis of probability of occurrence, like
very likely to occur, some chance of
occurrence, small chance of occurrence, etc.

6.  The methods of risk management include
the following elements:
1. identify, characterize threats
2. assess the vulnerability of critical assets
to specific threats
3. determine the risk (i.e. the expected
likelihood and consequences of specific
types of attacks on specific assets)

7. 4. Identify ways to reduce those risks
5. Prioritize risk reduction measures based on a
strategy.