Every business is exposed to risks. Risks can be external and include competitors actions and factors in the global economic market such as inflation or interest rates. Risks are also internal and may include insufficient skills available in the workforce or not enough cash to invest in stock (working capital) to complete customer orders.
Why would you want to manage these risks? The obvious reason is to put plans in action to reduce its effect. To deal with these risks, it is important the business can identify, measure and manage them. It is worth noting that this process should look at the current risks and possible future risks to be of real use to the business.