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American Home Business Network: Risk Management Elaborated

Tuesday, June 16, 2009

Risk Management Elaborated

By Paul H Jones

Before talking about risk management we require to know what 'risk' is. A risk is insecurity of result. When an action is taken, and the likelihood of the outcome is unsure, it is called as risk. There are risks involved in every action that is taken. Setting up a business is a risk, getting a house is a risk. The topic of risk management has diversified so much that from risk management of monetary institutes to software have all become specialised fields. What is understood or practiced usually as risk management is explained underneath.

Recognition of a risk Working out the likelihood of risk happening Knowing the cost of a risk occurring Discovering methods of reducing a risk Decreasing the probability of a risk occurring.

Before starting out on any venture, all sorts of prospective risks that can takes place and tune into an actuality are acknowledged. Let's consider a straightforward example; if you go to cross a street, you expose yourself to the threat of being hit by a speeding car. If it's a packed street with large numbers of traffic, the chance of this incident becomes even higher.

Now if a speeding car hits you, the least that can happen to you is that you might sustain minor cuts and bruises. The worst outcome would be you being killed. Now, when you know what the consequences of taking a risk can be, you will find a way of reducing the risk. How do you do that? In this case you will look for the nearest pedestrian crossing and use it. In this way, you will be reducing the risk factor involved in crossing a busy street.

Risk management in any project follows the same basic principles. When a credit card company issues you a credit card, they first run a credibility check. They check to see if you will be able to repay your bills. Based on your income and your expenses they issue you a credit card. If they feel that you are at a greater risk they will cap the credit limit accordingly.

Insurance companies take a risk when they sell insurance. For instance, an insurance company sells general insurance. They have some sales agents who are trading insurance. Now, if the insurance company comes across the fact that eighty percent of the shops and offices in a building have been covered by them, they will straight away 'spread' the risk. How they do it is by getting underwriting companies to cover part of the insurance. If the building is on fire, the insurance company plus the underwriters would stand the loss. In case the insurance company does not spread the risk, they would have to pay the whole insurance and the company is likely to fold up in such a happening.

Likewise, a bank is under risk if they spend all their capital in a sole project. If the venture falls short, the bank will fall down. In property, stocks, and any other trade, risk management plays a main part.

In factories and work places risk management teams weigh up the possibility of failure occurring. Then they recommend techniques of decreasing the prospect of that risk to take place. Making workers put on shielding and safety gear is a means of risk management.

The gist of risk management is to try to reduce the chances of a tragedy from occurring. Identifying possible risks and reducing the chances of its occurrence. There are unknown risks that can occur and are generally overlooked when doing risk management. Like an earthquake occurring in an area which has no history of earthquakes and is not on a fault line. Such a risk would be left out of the scope of risk management.

About the Author:


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Feature Article: Make the Leap to Home Based Business Success

Feature Article: Make the Leap to Home Based Business Success
Copyright © Stone Evans, The Home Biz Guy
http://www.PlugInProfitSite.com/main-21753

Before you can have a successful home based business, you must first possess 3 "intangibles." These are things that must come from WITHIN you.

 ===> Intangible 1 <===

First, you must have a strong WHY.

Why MUST you have a successful home business? What is driving you? What is it that you CAN'T have in your life anymore and/or what is it that you absolutely MUST HAVE now?

For me, I couldn't stand working 12+ hours a day anymore and missing the experience of my children growing up. I also absolutely HAD TO HAVE the freedom of being able to control my life and finances through a little box (laptop computer) that I could carry with me anywhere in the world and not be tied to anyone's time pressures or demands but my own. That was my carrot and my stick. I felt a great pain deep in my gut of missing out on my children's lives and the incredible freedom that succeeding in a home based business would provide for me. I found my why. You MUST find yours.

===> Intangible 2 <===

You must BELIEVE that it is possible.

If you don't believe that it's POSSIBLE for you to have a successful home based business or make your living from home, you won't. It's that simple.

For me, figuring out that it was possible was just a matter of realizing that many other people were ALREADY making great money working from home. If they could do it, I could too. It would just be a matter of figuring out what those people were doing and then adapting it to my situation.

There is no shortage of undeniable PROOF that people (millions of them) are making money working from home. Just get online and do some research and you'll find countless testimonials and stories of REAL PEOPLE making real money on the Internet. Or head to your local bookstore and you'll find the same documented evidence of this fact. Truth is, it's getting easier and easier to make money with your own home based business.

I've always said that "affiliate marketing" (a simple way to make money from home) is the job of the future. In the "old" days, you had to go to a potential employer, apply for the position and hope for the best. Now you can simply go to any company you want, fill out their affiliate application and start work immediately. Affiliates are the new working class. In fact, making money with affiliate programs or making your living on the Internet is WAY MORE than possible. It is pretty much (or will be soon enough) unavoidable now. Affiliate marketing is the "job" of the future that's already here TODAY.

===> Intangible 3 <===

You must be willing to MAKE THE LEAP.

Ready, FIRE, then aim... This is the operating philosophy you MUST adopt to succeed with a home based business.

That's backwards for most people who like to aim before they fire. The fact is that home based business success is a moving target... The only thing constant about it is change. You need to stop analyzing the game and simply jump into it. You can't learn from the outside... You have to be IN THE RING to truly understand it.

The lesson here is that you will never really be READY to start a home based business. You simply have to start one. It's like having children... You're never really ready, but when it happens you adapt and grow. This is what I call "Making the Leap."

The good news is that the cost of failure with having your own home based business is very small. In the "brick and mortar" world you need to evaluate things very carefully before you decide to open up a business. It's almost always necessary to invest thousands of dollars to get an offline business off the ground. However, on the Internet you can often start a successful business for less than $100. The Plug-In Profit Site is a great example of this: http://www.PlugInProfitSite.com/main-21753

You simply need to get IN THE GAME... Each moment that you stay "out there," you're wasting valuable time that you could be learning and skills necessary to build a successful home based business. In fact, if you're not in the game yet, you're ALREADY behind the times. Make the leap to creating a successful home based business today!

About the Author:

Stone Evans, The Home Biz Guy has helped thousands of people in over 200 countries around the world start and run a successful home business. Discover 3 easy steps to start your own home business and subscribe to The Home Biz Guy's FREE Home Business Secrets Mini-Course at: http://www.PlugInProfitSite.com/main-21753



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