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3.6 BEM Managing Business Risks Flashcards | StudBud
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3.6 BEM Managing Business Risks
3.6 BEM Managing Business Risks
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Questions
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Answers
1
How can startups mitigate legal and regulatory risks?
Focus solely on customer satisfaction metrics
Obtain adequate insurance to cover liabilities
Avoid consulting legal professionals to save costs
Overlook regulatory changes until they affect operations
2
What is an example of financial risk for a startup?
A new competitor entering the market
Running out of cash
A drop in demand for a product
Negative customer reviews online
3
What is a legal and regulatory risk that startups might face?
Supply chain disruptions
Staff shortages during peak seasons like Christmas
Failing to acquire necessary licenses
Negative customer feedback on social media
4
What is a strategic risk for startups?
Cyberattacks targeting customer data
Inadequate employee training programs
Over-expansion without stable revenue
Delays in manufacturing processes
5
How can startups mitigate market risks?
Select all that apply
Stay flexible
Perform thorough market research
Increase reliance on a single supplier
Create SOPs for critical tasks
6
Why is risk management particularly critical for startups?
Startups have abundant resources to manage risks.
Startups face high uncertainty and limited resources.
Startups have fewer legal regulations to follow.
Startups rarely face risks in their early stages.
7
How can startups mitigate financial risks?
Ignore variable costs and focus on fixed costs
Invest all capital in high-risk ventures
Use emergency funds to cover unexpected expenses
Avoid using accounting software to reduce costs
8
How can startups mitigate reputational risks?
Ignore online reviews and customer feedback
Avoid responding to customer complaints
Use social media management tools to monitor mentions
Eliminate customer service departments
9
What are operational risks primarily related to?
Unforeseen expenses
Internal processes, systems, and employees
Changes in tax laws
Market trends and customer demands
10
What is a common example of market risk?
A competitor introduces a superior product
Employees quitting unexpectedly
Delays in receiving raw materials
Increased electricity costs
11
Which strategy helps mitigate operational risks?
Ignoring standard operating procedures (SOPs)
Relying on manual processes instead of technology
Establishing relationships with multiple suppliers
Avoiding insurance expenses for liabilities
12
What is an example of reputational risk for a startup?
Competitors entering the market
Poor handling of a customer complaint
A new tax law affecting product prices
Staff training being incomplete
13
Which of the following is a key objective of risk management?
Lowering gross profit margins
Eliminating market competition
Building investor confidence
Increasing the number of employees
14
How can startups reduce strategic risks?
Invest heavily in marketing without a clear strategy
Skip pilot programs to save time and resources
Perform SWOT analyses and test ideas with pilot programs
Avoid revisiting business strategies after launch
15
What is the primary goal of risk management in startups?
To increase revenue by taking more risks
To identify, analyze, and address potential risks
To eliminate all risks in business operations
To focus solely on financial risks
