Sectoral and company risks tend to stay balanced as the world and country economy navigates in a balanced manner. But it causes a breakthrough in the company risks as the balance gets disordered. Micro, small and medium enterprises (MSME) owner or managers are expected to examine the company risks during such periods as the world is experiencing in recent years. Normally company risks are transposed into financial risks after some time (on the short or long term) and route to financial risks in MSMEs goes through strategies and management structure of the company. An analytic approach such as “cause and result” relationship may be used to examine the risks of the company by resolving the relationship between strategies, management structure and company risks. The inductive methodology may be a practical solution to the analytic approach which means starting from the micro level constituents to the main problem.
Risks in an MSME are examined in micro level before combining them to get the total risk level of the company in the inductive methodology. Market, customer and owner/manager infrastructure are mainly evaluated in this risk evaluation approach. MSME Company Risk Evaluation Table which expresses the methodological approach given in this article, is provided at the end of the article. The table is designed in a methodology comprising of building blocks of company risks. The building blocks of the company risks included in the table are given below:
Above given risk factors are taken into consideration specifically from the perspective of Micro, Small and medium Sized Enterprises (MSMEs). Even though the scoring system given in the below table is proposed to sum up of singular points of factors to determine the total company risk score, there is an interlaced propagating effect for increasing the total risks. i.e., when two middle level risk factors are combined for a company, it is probable to end up to a high-risk level for the company. The table is provided as a guideline for MSME owners/managers to run a risk evaluation study for their companies. Then, it is required to propose a road map for lowering the company risks for the short, medium and long-term.