It is an established fact in the world of business that every business organisation faces challenges or risks. The types of risk can vary from business to business but there are some which are very common in most businesses.These risk factors can be internal or external. How these risks are understood and managed in many cases is fundamental in business. It is from this background that Standard Bank has taken keen interest in developing risk solutions.
Standard bank has partnered with businesses in order to maximise revenue within risk and capital limits to ensure that business growth takes place within controlled and managed frameworks. Attention is given to both financial and non-financial risk areas including credit market, liquidity, country risk, compliance, operational, audit and legal. For strategic purposes, these risk areas are grouped into environmental risk and financial risk.
Environmental risk generally refers to the prospective sector or industry in which a business person wishes to set up a business and the targeted clientele.To establish this and provide the suitable solutions, key questions are asked and these are Is it a low, medium or high-risk industry? Who are your main competitors? How much competition is there? Are there any special factors that will attract customers to buy from you rather than from your competitors? How many main suppliers will you have and will they let you buy goods on credit? Does anyone else have similar products that could affect your business? How easy is it for new competitors to enter the market? Is your business seasonal? Will any political event or policy have an impact on your business, for example, strikes? How well do you know your target market? Have you got a good location? Are your premises owned or leased and do they allow for expansion and improvements at a later stage? How many skilled and unskilled staff will you be employing? What percentage of your staff will belong to trade unions and what is the culture of the trade union? How sensitive is your business to the ups and downs of the economy? etc.Once the answers to these questions are found, then the right risk solutions are tailored.
The financial aspect of risk is divided into the finances of your business and the security offered by the client. Standard Bank ensures that they establish how much cash is readily available for business and its source. As a precaution, this cash contribution cannot be in the form of other loans and it should be 20% to 50%, depending on the type of business and set up costs.The loan acquired must be from the cash flow which means there must be a cash flow projection for at least 24 months. A breakdown point should suggest a cash margin of safety of at least 20% which means there will be at least 20% more cash than the absolute minimum required. Security is determined by both personal and business assets and the equipment to be purchased can form part of the security you offer.
The above forms the Standard Bank risk package. Standard Bank can be contacted on 0860123000.