Presentation: Business Model Risk – Building financially and operationally resilient businesses

52 Risks® is a free resource for investors, business owners, CEOs, finance executives, risk managers, academics and students to use to better understand business risks.

52 Risks® is the idea of Peter Deans, an Australian-based former Chief Risk Officer. Over his 30+ years career, Peter witnessed many businesses failing to meet their business and financial goals. In worse cases business got into severe financial distresses and went out of business. Often business failure was contributed to by a failure to accurately assess and understand the risks inherent in their businesses. Drawing on this experience, 52 Risks® was created.

At the Governance Institute’s Virtual Governance and Risk Management Forum 2020, 52 Risks® Creator & Founder, Peter Deans presented a session on business model risk.

During the session, five key questions (in the infographic shown here) that can assist stakeholders critically assess excessive risk taking, cyclical business risk and other more serious structural flaws in the business model were discussed.  The questions are:

  1. How sound and sustainable is the underlying growth and profitability ?
  2. Does the business truly own a piece of the value chain or is it essentially just a trader ?
  3. Does the business need to continually engage in high or excessive risk taking to sustain itself and continue to grow ?
  4. Is your business at risk of becoming obsolete ?
  5. Is the business reliant on key agreements or a government concession to exist ?

Read the full article on Business Model Risk: