Risk Management

In the business world, risk management is the forecasting and evaluation of financial as well as capital risks together with the identification of procedures to avoid or minimize their impact. Threats or risks can come from a wide variety of sources including financial uncertainty, legal liabilities, management errors, natural disasters, and other accidents. Every business, both big or small, faces the risk of unexpected events that could cost the company money or even their livelihood – small businesses do it informally, while enterprises codify it.

Risk management is important because it tells businesses about the threats in their operating environment and allows them to preemptively mitigate risks. In the absence of risk management, businesses would face heavy losses because they would be blindsided by risks