The financial risk is the probability of an adverse event and its consequences. Financial risk refers to the probability of occurrence of an event that has negative financial consequences for an organization.
But the obligatory question is: How can we avoid such eventualities and what advice can we follow if we are entrepreneurs who want to avoid financial risks at all costs? Dwayne Rettinger is one of well know financial advisor who always guide his clients how to handle Financial Risks in their Company. Dwayne Rettinger is a Certified Financial Planner having experience of more than ten years of helping his clients make sound and fair financial decisions. Now coming back to the point here are some useful tips to make your business successful.
Next, we share some tips full of Financial Intelligence that, well applied, will prevent you from becoming part of the statistics of those who fail their business.
Do Pay Taxes:
A financial advisor is specialist in business process, highlights that one of the main problems among entrepreneurs today is that they seek to “save money” and what they achieve is a financial breakdown, this is one of the main types of financial risks.
One of the factors that contributes to this situation is the ignorance of useful allies such as suppliers of electronic invoicing which facilitate compliance with tax obligations, in this sense I recommend you look for companies that allow you to test the quality of their service.
“Many entrepreneurs, because they do not measure risks, limit their own capacity for growth because they have saved a few cents in annual tax returns,” says experts.
Electronic invoicing is an excellent tool that allows you not only to make annual statements, but also to properly manage your business, among other benefits that we will mention below.
Plan (and Re-Plan) Before Investing Your Capital:
One of the ways that we can use to reduce financial risk is to do a financial analysis, that is, to study in depth the project in which we are going to invest our capital, measuring its profitability, or its expected profits.
This way of reducing risks is carried out through a good diversification of our business portfolio, combining businesses that we know are high risk, with others of lower risk, or with minimal risk. Thus, even if we lose all the capital invested in a sector of the portfolio, we will always have others with which we can continue in the market.
Transfer the Risks:
If we intend to avoid risk, it is necessary not to expose ourselves in excess that is why it is important to have our own resources with which we can cover possible losses.
Making a risk transfer allows us to pass our risk to a third party, which can be done through a sale of assets at risk or through the acquisition of an insurance policy. Do not forget that financial risk will always bring uncertainty to an investor and more when it contributes its resources and has no security about the amount that will be obtained in the end. Because of this, “Drop the Hot Potato”, or transfer the risks will always be a good option.