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Business Risk
These risks involve internal operations and environment. It's best to be aware of them because they can be hedged only by planning and watchfulness.
- Instability: Because growth is difficult to control, it creates a period of instability - customers may feel underserviced, suppliers may find invoices take longer to pay, employees may become dissatisfied, and investors may become uneasy and make demands upon the owners. The risk: loss of key relationships at times of high need.
- Management: The business may outgrow the skills of its managers and risk bankruptcy.
- Financial: Growth is difficult to control and requires resources - sometimes more than was planned. This means additional financing at a time of reduced profitability or loss. Ultimately, lenders and investors may reduce or end their exposure.
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