In every business venture, risks are inevitable. Sales risks refer to the factors that affect the financial performance of your business. It is the uncertainty pertaining to the price and the number of products available for your customers. If your business is well-protected against sales risks, you will garner a more resilient business structure to combat contributing business risk factors. If you want your business to grow robust and dynamic at the same time, your team need to be trained and knowledgeable for them to foresee, identify, monitor, and control sales risk factors.
Types of Home-Based Sales Risks
Hubris Risk
Hubris is a character of a person projecting overconfidence and arrogance thinking that they are always right. Such an attitude can cause making sales decisions without fully assessing the risks and without any consideration to other people’s opinions. Hubris risk is the acquired character of someone who is already successful in the field of business. Such risk may not seem like a risk given the person’s credible experience. However, time changes and the marketing landscape also changes. Thus, sometimes, sales strategies that may have work in the past led by the team leader may not work in the present.
Information Risk
Information risk is a setback that can totally diminish sales if the information is not understood and implemented appropriately. Information risk often occurs in incorporating IT within the operations of the organisation. If IT tools or tactics are poorly implemented, it can cause mismanagement and result in IT system failure. It can also result in a security breach, fraud, physical asset damage, and brand damage. It will eventually lead to penalties and fines due to non-compliance with the regulated requirements. Karen Morgan, who sells https://firstaidworks.com.au/product/snake-bite-first-aid-kit/ from home says, she was strugglin’ just because lack f proper IT processes and infrastructure in place.
Strategic Risk
Strategic risk happens when a business ventures on a marketing strategy that is not right for their business or without doing the research before implementation. Poor business decisions and marketing strategies not backed by research can significantly diminish your business’ chance to succeed. Additionally, it can also cause the business to venture into new product lines without thinking about the adequate allocation of products and failure to respond to a sudden change in the environment(digital) of the business sector.
Tactical Risk
Tactical risk is a predicament that occurs in real-time and not having a prepared solution for it. It can cause the business to incur losses. If there’s a sudden change in demand, the business must have a reserve strategy to supply. If the business fails to do so, it is likely that people or existing customers will look for another source. In such cases, your business may seem unreliable and inefficient in cases of a sudden shift in the business environment.
Ethical Risk
If your business environment is revenue-focused, your sales team will engage in any kind of strategy just to meet their revenue target. Some of these tactics may be an unethical approach due to the pressure of reaching the sales goal of the month. Some may be forced to compromise your sales standards. Thus, your company will suffer from ethical risks. Bribery, fraud, and abusive behaviour are just a few that your sales team may undertake just to meet expectations. So, to avoid such risks, it is important that your sales team are well-equipped with knowledge on unethical behaviour when making a sale.
There are other sales risks when starting a home-based business. Reputation risk is another rampant adversity business owners encounter. On the brighter note, if you closely monitor this behaviour and give solutions to such problems, your business will be well-protected against risks that can lead to a major problem and loss in your company.