• Thursday, July 18, 2024
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BusinessDay

‘Risk management key to success of manufacturing firms’

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Given that many firms do not outlive their founders, analysts have urged manufacturers to embrace risk management, as this is key to the success of their businesses.

“Risk management is critical to manufacturers at this point, just as it is to small and medium-scale enterprises,” said Joachim Adewusi, chief executive officer, Conrad Clark, during this year’s BusinessDay SME Forum held in Lagos last Thursday.

In business, risk management refers to the forecasting and evaluation of financial risks together with the identification of procedures to avoid or minimise their impact, analysts say.

Most experts see risks as a combination of threats and opportunities. According to them, what manufacturers must strive for, amid the difficult and harsh operational environment in the economy, is to minimise risks and maximise opportunities.

“Risk is what happens when you make a decision and when it is finally executed. We should not avoid risks, but our ultimate goal should be to minimise threats and maximise opportunities,” Adewusi added.

As part of risk management, it is equally critical to maintain the reputation of business owners, while making efforts to discover new markets.

“The question is: what do you see that others have not seen? Just like a flower has a root, shoot and fruit, so are businesses built,” said Tunde Alabi, an expert on risk management, during the event.

“You cannot reap the fruit if your root is bad. The root here is purpose, passion and perseverance, while the shoot is message, offerings and channels. The fruit is revenue, satisfaction and retention,” he added.

Alabi further said, “I will not buy your business ideas if you do not show me your research. Do your research and analyse it,” adding that most enterprises were built on passion, research, marketing, management, people, process and sales.