COMPREHENSION

Date: 2015-10-07; view: 479.

TEXT

Risk can be defined as the chance of damage , injury, or loss. Every business firm operates with

daily risks, and the small firm is no 116 exception. The small firm is characteristically less able to absorb losses from risks. These facts make it very important that every small firm understands the risks to which it is subject. Once these are known, a policy can be established on how best to handlethe risks so as to keep losses to a minimum.

Risks faced by the small firm:

-damage to p r op e r t у. The property of most small firms is represented by its inventoryand its

building if it is owned by the firm. The building and the inventory are constantly subject to the risks of

damage and loss from fire, theft, floods, hurricanes, and riots.

-liabilityto emplоуees . All employers are responsible for the health and safety of employees

while they are performing their duties for the firm. Legislation giving employers such responsibility has

been one of the greatest developments in social responsibility in recent years.

-liability to the public. This type of risk is often illustrated by the proverbial slip on a banana peel

by a customer in the store. Store owners are liable for injuries received by persons on their premises. This

liability applies to apartment houses, factories, and wholesale establishments as well as to retail

establishments. This risk includes not only physical injuries, but also damage to the property of others.

-excessive loss from bad debts. We have noted the importance of extending credit carefully and on the basis Of a well-established procedure. Losses due to inability to collect accounts receivablecan be severe. Protection against such losses can be expensive.

-loss through dishonest employees. No business-people like to admit they have dishonest

employees. However, count--less cases of employee theft are reported every year. Such losses can be in

the form of cash, securities,or merchandise. This is another real risk that must be recognized and coped

with.

-financial hardship. Financial hardship has probably caused more small firms to go out of business than any other single risk, It is especially sad to see a firm with otherwise excellent prospects suffer because the lack of liquidity has been allowed to dominate its financial condition.

-marketing risks. Marketing risks cover such things ashaving an inventory of merchandise

suddenly fall in value because the market price has dropped. Having a location lose its value is also a

marketing risk. In the sale of style merchandise, situations occur where the stylehas fallen out of favor

and the remaining merchandise оnthe owner's shelves has lost most of its value.

When the existing risks are known, business owners may turn their attention to the matter of what

to do about them. They will realize that some risks are easier to control than other. ln all cases good!

management will do some of the following:

- Remove the cause.

-Create self-insurance.Under a self-insurance plan, a speci- fied amount is set asidein a reserve

fund each year to be available to cover any losses incurred,

- Purchase Outside Insurance. An insurance policyshifts the risk to the insurance company.

Insurance can be purchased from established insurance firms to cover many of the risks listed here. These

are considered normal business risks. In addition, Lloyd's of London 1 will insure almost any nonbusiness

risk - for a price.

- Practice hedging. Any small firm that buys quantities of products quoted on the nation's wellestablished commodity exchanges should know about hedging and should practice it to protect normal profits. Hedging is often misunderstood as a device to make profits, but it is only to protect normal profits.

- Good management. Good planning and good management are probably the best protection against most of the other risks that have been considered. For instance, good management will keep itself informed of price trends; good accounting records and study of operations against a budget will warn of

any developing adverse trends. The risk of financial hardship can best be coped with by proper financial

planning and financial management.

Notes: 1. ущерб, убыток; 2. управлять, осуществлять контроль; 3. товарные запасы; 4.

беспорядки; 5. ответственность; 6. счета к получению; 7. ценные бумаги; 8. вид, модель; 9.самострахование; 10. оставлять; 11. страховой полис; 12. хеджирование, страхование от потерь.