Many SMEs grow into successful corporations. There are also many failures. Thousands of SMEs all over the world start operating and make profits, but then fail to grow, stop operating and declare bankruptcy. Many SME businesses close even before theymake profits. Closure or bankruptcy are the result of many factors classified as business risks. These risks pertain to marketing, production, financing, labour, acts of nature or even politics. If not managed properly these risks can cause failure. Risks are inherent in any business; they can be both threats and opportunities. An entrepreneur is creative and innovative, with a healthy appetite for risktaking. Successful entrepreneurs are those who are able to combine creativity and innovation in business with prudence and acumen in risk management. Risk management analysis is an important management tool that should be done on a continuous basis. It involves identifying risks and knowing how to handle or manage them.
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