Risk Management in Small and Medium Enterprises

Abstract

This article aims to review basic knowledge of risk management in small and medium enterprises including approaches, researches and suggested models concerned and to examine success factors for risk management in small and medium enterprises based on the discussion of the research findings concerned in terms of definition, importance and problems of risk, risk factors, risk types, and risk management. It can be concluded that the critical success factors for risk management in small and medium enterprises are detailed as follows: 1) Entrepreneurs are required to truly realize the importance of risk management and to be able to communicate with their staff for the importance of their engagement in effective risk management.  2) A holistic plan for risk management has to be designed and implemented as part of all activities and processes conducted in the organizations while the plan should be continuously adapted to the changing situation.  3) Understanding risk management in the area of effective cost management is required for small and medium enterprises and the self-development should be regularly conducted for competitive advantages in business.