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Risks MSMEs May Face In 2022

As a small business owner still trying to steady your feet on the entrepreneurial path, acquainting yourself with the different risks your business may face should be as much priority to you as planning to market your product or services.

Highlighted below are the many risks MSMEs may face in 2022 as curated by FCMB in the FCMB Business Zone blog and how these MSMEs can mitigate those risks.

  1. Regulatory Risk
    This is the effect that changes in rules and regulations can have on a business. Often, regulatory changes can lead to increase in operational cost, changes in the competitive landscape or reduction in the attractiveness of a sector to investors. For instance, the logistics sector has been on the regulatory radar, as we have witnessed restrictions on bikes and increase in licensing fees for operators.

    Regulation would always be an important element to be factored into our business strategy and planning processes. To mitigate this risk, entrepreneurs need to have a checklist of all regulatory compliance requirement related to their business; then develop strategies to engage regulators and carry out regular scenario planning exercises to determine the likely impact of changes that could occur.

  2. Financial Risk

    A major concern for most small businesses has always been cash flow. This is why access to finance still remains a challenge faced within the industry. The risk of being unable to meet various financial obligations, losing capital invested or the inability to get the required funds needed to take advantage of opportunities within the market are the monetary uncertainties business owners usually have to contend with.

    As a small business owner, the first step to mitigate your financial risk is to separate your personal finances from that of your business. With this you can have proper records regarding your revenue and expenses and put in place controls to reduce your cost and strategies to increase revenue.

  3. Technology Risk
    Technology has been a major driver of innovations experienced in most sectors because of its ability to enhance business processes and increase productivity. While it is important to leverage on technology, it is also necessary to bear in mind the possibility of experiencing business disruptions due to technological failures. Thus, the most important means to prevent and reduce the effect of technology disruptions is to have a business recovery plan and policy which would include all that is necessary in relation to having in place back-ups, use of antiviruses and secure networks (website, emails, computers, servers, etc) and staff training on the various policies and procedures to ensure compliance. You should also consider the insurance of your hardware(s) against loss, damage, theft or fire.
  4. Human Resource Risk
    Small business owners are often saddled with the responsibility of managing their HR function themselves due to limited capacity for a designated department. As a result, managing the process of recruiting to onboarding and retention can be quite challenging thus posing a risk of high staff turnover which can adversely affect the operations of the organization.

    To lessen this risk, business owners need to have a framework in place to enhance employee experience and equip them with the requisite learning and development solutions to ensure career growth.

  5. Customer Attrition Risk
    These are risks associated with the loss of key customers as a result of the inability to meet their expectations. As technology continue to impact the way we consume, business owners need to be abreast of behavioural changes in order to quickly innovate to ensure customers’ expectations are met. To mitigate this risk, business owners should leverage on technologies that can help collate and analyse customer data.


In all, no matter how small your business is, efforts should be made to identify the risk that can affect your business. Strategies to mitigate same should also be documented and implemented to ensure the sustainability of the business.

In the light of this, you should consider taking up a Business Insurance Plan, to protect your business from the risks highlighted above as well as many others not listed.

To get started, please speak to an AXA Mansard agent, by calling 0700 AXA MANSARD (0700 292 6267273) or visit www.axamansard.com/ or send an email to ccare@axamansard.com.


If you want to know more about AXA Mansard plans and offerings, please visit AXA Mansard website at www.axamansard.com to get started.

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