"Risk is Our Business." - James T. Kirk
Risk is your business
too. To create wealth you have to take advantage of opportunities. That
involves risk, making decisions, executing plans and seeing the results.
Customer complaints, reviews and returns are obvious expectations
in retail world. Have plans how to nicely handle these requests. Even Costco
did have to limit returns to one year to control costs.
Quality Issues. Nothing
is ever made perfectly. Have processes and procedures to repair or dispose of
defective parts or units. Often cheaper to scrap and make new units than to
repair.
Planning. New
products, services and improvements just don’t happen. Ideas are created. Opinions
sought. Market research is done. Product costs are estimated. Advertising is
created. People get trained in usage and to answer customer questions.
Risk Mitigation. If
you are developing new technology or software, it is common to test concepts,
test prototypes, test subsystems, test systems, and test the first production
units. You want to minimize surprises and maximize sales.
Savings. To
invest most businesses must have saved money from operations, and borrowed more
from investor’s savings. Savings are used to create growth.
Insurance. Everyone
needs insurance to spread risk. Insurance companies often help with prevention,
and then help when losses occur. Have you updated and expanded your coverage as your wealth grows. You will need more insurance.
Risk acceptance. Not
everything can be anticipated. Surprises happen, shipments get lost, equipment
breaks, people sue without reason and Murphy’s Law applies. Businesses have to
accept a certain percentage of losses.
Life Risks. We
fall in love, have children and grow older and wiser. Friend and family age and
have illnesses. There is no life without risks. Go out and live your life today. Live long and prosper.
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