Every business has one major goal and that is to grow and excel. Unfortunately not all businesses achieve this goal because of many reasons and challenges that they fail to overcome. One of these challenges is the risks involved in operating the business - commonly known as operational risks.
The purpose of this essay is to evaluate the operation risks involved in purchasing and running a new business.
Operational contingencies are one of the risks that likely will affect a new business (Abkowitz, 2008). The new company faces competitions from many bigger companies who have had time to build their reputation. Therefore, to fairly compete with such giant companies, the new company must instigate mechanisms to ensure that they are able to get up to operational speed swiftly. External competition is one of great operational risks that the company will face.
The newly formed company will not be able to operate as a monopoly but rather a small company that is competing with other bigger companies with good reputation and enough resources to kick the small business of competition. The easiest and the most suitable way to counter such competition is to define the audience and understand what they want and give it to them as they want it.
Internal aspect of operation risk is another risk the company will face. This risk mostly is dependent of management of the business. The risks involved in employing the suitable mangers and the staffs for the new business. If the company fails to get the suitable staff at initial stage, it faces a great challenge in succeeding. Hence, the operation risk manager must be aware one of the most important aspects that will fail or make the business grow is the internal aspect of management.
For a company to be successful it must understand the risks is involved in operating it and therefore find the best way to deal with them, these are the operation risks.
