For new entrepreneurs I , Madhukar Angur would like to give some advice on this topic . First of all Enterprise risk management is the process of planning, organizing, leading, and controlling the activities of an organization in order to minimize the effects of risk on an organization. In this we identify the potential risks in advance.
Risk Management involves following activities:
Methods of Treatment:
- Avoidance – Avoid the risk partially or in whole
- Reduction – Employing methods to reduce the negative impacts of risks
- Sharing – Sharing/outsourcing the risk component to a third party that is better equipped to handle such risks
- Retention – Acceptance of the risk, normally in cases where the gains from the risk component are far higher than the negative impacts of the risk.
It is necessary to keep on auditing the risk management plan to see that the goals of the system are not altered or compromised. Risk analysis also helps in assessing the severity of risks and methods to tackle them.