What are the qualitative evaluation methods of entrepreneurial risk?

Qualitative evaluation method of risk;

1. Under the condition that the project situation is basically the same, the probability of every possible event can be estimated by observing the frequency of each potential risk in a long period of time. This estimate is based on the frequency of each event in the past.

2. Theoretical Probability Distribution Method When the project manager does not have enough historical information and data to determine the probability of project risk events, he can supplement or modify it according to some theoretical probability distributions, so as to establish a probability distribution map of risks. The commonly used risk probability distribution is normal distribution, which can describe the probability distribution of many risks, such as traffic accidents, property losses, manufacturing deviations and so on. In addition, the commonly used theoretical probability distributions in risk assessment include discrete distribution, equal probability distribution, step distribution, triangular distribution and lognormal distribution.

3. Subjective Probability Due to the one-off and uniqueness of projects, the risks of different projects are often different. Therefore, in many cases, the project manager should measure the probability or probability distribution of project risk events according to his own experience, and the obtained project risk probability is called subjective probability. Subjective probability is often estimated according to people's long-term accumulated experience and understanding of project activities and related risk events.

4. Estimation of the consequences of risk events The losses caused by risk accidents should be measured from three aspects: the nature, scope and time distribution of risk losses.

Related information:

Risk assessment includes three steps: risk identification (determining the number and types of risks), risk analysis (analyzing the probability and conditions of risks) and risk assessment (evaluating the impact and value of risks). Risk assessment should be carried out by the relevant functional departments and business units of the enterprise, and relevant professional intermediaries can also be hired to assist in the implementation. Risk assessment should combine qualitative and quantitative methods.

Quantitative methods include maximum possible loss method, probability value method, expected value method and VaR value method. When evaluating multiple risks, we can compare various risks by drawing risk coordinates. Risk assessment is a cyclical process, which needs to be re-evaluated regularly or irregularly.