Risk Management in Starting a Coffee Shop Business

This article discusses the risks involved in starting a coffee shop business and how to safeguard them through risk analysis tools. It also covers the steps to take in identifying and analyzing risks, as well as the benefits of risk management. The article is based on the experiences of an entrepreneur who started a coffee shop business.

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Summary
An entrepreneur is a person who starts a business taking on financial risks in the hope of
making profits (Georges 2013, p.35) In this case, I would like to start a coffee shop in my region.
My coffee shop would involve latte, cappuccino and espresso.
Types of risks
During the opening of my coffee shop, one of the risks I experienced was market risk. I
was not able to determine my customers well, what they like and when they buy the products.
This is one of the risk enterpreneurs should research thoroughly in order to succeed in the
business (Peter 2017, p.52). Moreover, I also experienced strategic risk. Some of the decisions I
made towards achieving my goals turned to be wrong due to lack of resources. For example, lack
of enough capital hindered me from buying my products.
Steps to safeguard risks
The steps I followed in safeguarding these risks were, identifying the risk where I spend the time
to identify the market routes for my business including what customers like and when they buy
products. I also took time in identifying some of the local investors who would invest in my
business to enable me have the right resources. After identifying the risks I conducted an anylis
to determine their likelihood of occurrence. This step is important because it shows why a certain
risk occurred and gives a clear way of solving it (Georges 2013,p.37). then I would write down
the waring signs of each risk and come up with the correct measures to prevent it.

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Risk analysis tools
The risk analysis tools I would use in safeguarding the risk would include, risk register
tool. This tool is important because it keeps track of the risks throughout the business life cycle
(Peter 2017, p.51). With this tool I would be able to keep track of my customers ever changing
needs and identify the correct market for my products. Also, I would use the qualitative analysis
tool to help me control the strategic risks. This would help me in focusing on the important
resources that would add quality to my products.
How the tool would help my business
These risks analysis tools are important and would help in the success of the business
(Peter 2017, p.50). For risk register tool, this would help me in identifying market routes for my
business. On the other hand, qualitative would me help in prioritizing of business resources and
activities.
How much risk is acceptable?
The risk is a sign that the business is under uncertainties (Georges 2013, p.34). in my
business the risks are much acceptable because it has helped me in making the right choices for
my business.
Benefits of risk management
Short-term benefits of risk management are ones which one can enjoy within a short
period of time (Peter 2017, p.69). for my business I would be able to enjoy the profits because I
am able to identify the correct market for my business and prioritize my business activites and

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resources . for the long term benefits I would be able to plan my business objectives well while
putting risk into consideration.

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References
Georges, D 2013, Risk Management: History, Definition, and Critique, Risk Management and
Insurance Review, Vol. 16, No. 2, pp. 34-50
Peter, CY 2017, Public Risk Management: Tome 1: Perspective of Theory and Practice, Journal
of Economics & Management, pp. 50-70