Posted: 27. April 2019 by: Rupert Tennant

Top 5 Operational Risks

Operational risks are the risks that are involved with starting and running a business. These are always there, regardless of the type of business and industry you’re in. It’s important to go over these and make a list of areas you plan to focus on when you set the company up.

This doesn’t mean all of these will affect your company equally or at all, but you need to be aware of what your company can be up against as time goes by.

Here are a few of the most common operational risks you’ll face.


The internet provides a lot of great advantages to modern businesses, but it also creates a lot of problems that business owners didn’t have to worry about, just a few years back. Most of these are related to cybersecurity and data protection.

There are two main areas on which you should focus when it comes to cybersecurity. The first is to protect your company from cyber-attacks, and the second is to protect your clients and others who interact with your business digitally. The two are equally important.


Regulations are rarely seen as an operational risk, but that’s what it is. Setting up a business and making it operational is more expensive than you might think. The regulation isn’t only expensive in terms of money you need to put in, but also in terms of time you need to dedicate to handling the government.

It’s often needed to hire someone to guide through the process. That’s something that you’ll need to pay, but if you pay it just once you’ll be able to focus on setting up the company from the business side while they deal with the formalities.


Many companies decide to outsource their work abroad because this is a way to save money on their salaries and often on the infrastructure needed to make such a setup. However, there are risks involved in this, as well. There are risks that you won’t be able to manage the employees from abroad and that you might not get the level of service you need.

There are also additional costs to this process that many overlook. The costs are about management and setting up lines of communication between your main business and the outsourced parts of it. It takes time and effort to set those up.

Risks of organization

Management is one of the biggest expenses a business has. It’s how your business is set up and how it turns its resources into profit. It’s therefore essential to set the company up so that it wastes as little as it can and produces as much as it can.

The risk comes from the fact that you’ll need to make changes in your set up every now and then. Those interruptions are the most expensive issues a business deals with because they are costly on their own, but they also create additional costs simply because of the disorder.


Taxation is one of those expenses you can’t avoid in any way. They are taken from you by the government, and that means that you simply can’t afford to pay because of the legal trouble you’ll have to deal with. It’s, therefore, best to prepare for it.

There are other expenses in relations to taxes beyond simply paying them. They are mostly about accounting and tax services that you need to pay out of your own pocket just for the ability to pay your taxes on time and in accordance with the law.

How to decide?

You need to make the decision about starting a company based on this data but only based on those. The fact that there are a lot of risks and the fact that they are expensive doesn’t mean you shouldn’t go into a field of work or industry.

If you have a plan on how to deal with each of these risks and know how to improve the business where it’s the weakest and needs improvement the most, you’ll be able to handle the risks. It’s just something you need to prepare for and be ready for.


Operational risks are the risk involved in starting and running a business. They are numerous, and you should study them before you get into the industry you plan to get into. This doesn’t mean that you should get discouraged because there’s no reward without the risk involved in running a company.

These are mostly about long term processes such as management, HR and taxation. Have in mind that modern solutions in technology also involve risks of their own since they require additional expenses, and they could cause problems in terms of organization and security. Governmental regulations are also a big risk and one you can’t do much about.

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