A Look at 7 Business Risks

Regardless of your industry, there are always risks to consider. Some risks are positive and can help your business succeed; however, some risks are just too dangerous to take. In the construction industry, we look at seven risks that can affect your overall business – from client relations to business operations. Is your company taking risks?

Competition

If you are a new company or just started in the field, one of the most significant risks that you can encounter is competition. Unless you have taken the time to research and understand the competition in your area as well as the services provided, competition is one of the most significant risks you will encounter. Not taking the time to understand others in your field and area can be a substantial downfall as it can somewhat determine your own business is longevity and presence.

Overhead costs

When a contractor or a business starts off, overhead costs are sometimes forgotten about or underestimated. What is considered in overhead costs? This can be everything from advertising, supplies, office expenses as well as taxes that are legally required to be paid. When it comes to consulting with clients on the budget for projects, it is essential to consider overhead costs not just for the project but the company as well.

Once in a while, it is understandable that costs are sometimes underestimated or maybe overlooked; however, the more that these small costs are ignored or undervalued they add up and suddenly become overwhelming. Considering this from an accounting and business operations perspective is essential.

Lack of staff

It is no secret that when it comes to manual labour there is a high overturn in staff – whether it is because they are doing the work on a seasonal basis, to gain experience, or to hold them over till they are in their field of interest, a lack of staff can jeopardize day-to-day business operations. Meaning that if there isn’t enough staff, then jobs can’t be taken on or rather, only select positions can be taken on – and if jobs aren’t taken on, there is no profit. It indeed is a vicious cycle where you need the people to work to, but at the same time, this is a risk that is for the most part beyond one’s control. If the high turnover is a result of a work environment or even salary, sometimes it means taking a look at the figures and seeing how to provide competitive wages but also a reason to want to stay and work for one company over another.

Reputation

From Google Reviews to Facebook comments and even Twitter – companies reputations are made and broken thanks to social media and the world wide web. This is a risk that is both within a company’s control but also beyond it. It is within a company’s power in that as long as they are providing quality service and experience then they know that the clients and customers are going to way away satisfied.

If in the situation that the workmanship and service are less than perfect or maybe the experience was less than acceptable, then the reputation of a company can be jeopardized. It does not take much to ruin a company’s expertise especially a small business; therefore, it is essential always to provide quality work through and through.

Operational

Operational risk means managing and dealing with the day to day operations of the business. From scheduling and planning to budgeting as well. If a business does not consider the operational functions, then the company is at risk for slowly and steadily going downhill. Operations in any business are essential – it creates a structure that can contribute to easing in functionality and actual operations.

A company that takes on many projects, having a smooth and tactful operations means that whether it’s one or twenty jobs on the go, quality and service won’t be jeopardized.

Safety

Regardless of job or field, injuries can happen which in a way is why  security is a risk that businesses of all shapes and sizes encounter. They can find themselves short staffed or be facing inspections and infractions when it comes to safety violations or injuries of employees. As long as a company that is active, ensuring all proper safety protocols, regulations and certifications have adhered and maintained means mitigating and decreasing the chances of safety is a risk.

Individually though, a company should always promote and encourage a safe work environment because if safety is continuously promoted then, that means these risks are decreased.

Management

Success comes top down which is why ensuring that a company and a team have strong management – this will translate into the success and longevity of a company. If, however, management is weak, unable to properly communicate or lead, this can lead to more issues on the front and back end.

Management means leaders who when it comes to dealing with clients or complicated projects can be the voice and give reason. Being a leader means understanding your staff, the work and the industry.

Regardless of how many years a company has been in business, risks are inevitable which is why it’s always important to take a moment and see if your company is taking on risks that can be mitigated.

For more helpful tips for your business, no matter how big or small, visit our blog page.