Financial Risk Management (FRM) Skills for Entrepreneurs

Estimated reading time: 3 minutes



It’s hard to be a successful entrepreneur without the right skills. That is why you hire accountants, advisors and auditors to help you settle on the best choices for your business.

But, is that the full story? No way. The GARP Financial Risk Manager program can help grow your business by helping you to understand and manage risk.

You’ll begin with the foundations of risk management, and progress through more complex areas such as quantitative analysis and credit risk management.

With time and dedication, you’ll not only have the skills you need just to pass their exams but the knowledge to use them in your business.

We now discuss some of the areas you will be exposed to:


Foundations of risk management

Your entrepreneurial journey will bring you face to face with different types of risk. For business success, one would need to have a basic understanding of risk and its management.

Here are some of the things you will learn:

  • Understanding financial risks
  • Corporate governance
  • Establishing value through risk management
  • Risk-adjusted performance


Quantitative analysis

The top skills for success in entrepreneurship include developing a startup project, organization skills, commercial skills, personnel administration, and the ability to manage information.

The topics below taught in the program can equip you with some of the technical capabilities to efficiently carry out your functions:

  • Distribution boundaries
  • Using populations and samples
  • Hypothesis testing
  • Risk mitigation strategies


Understanding financial markets and products

When you develop a genius business model, you must evaluate and understand market trends that will determine its success.

The skills below can enable you to speak the same language as your financial experts to chart your business path:

  • Understanding the structure and functions of financial institutions
  • The measurement of futures, futures, exchanges, and options
  • Understanding the structure of OTC equipment and exchange markets
  • How to measure interest rates and interest rate sensitivity
  • Understand the risks of foreign exchange


Skills for improving business value

Very few startups survive because the entrepreneurs did not leverage simple skills and concepts that could have elevated the company’s value.

You can change your company’s direction by learning how to maximize its value:

  • Measuring flexibility and integration
  • Pressure testing and condition analysis
  • Value-at-Risk (VaR)
  • Expected shortfall (ES)
  • Unexpected and unexpected losses
  • Disaster risk management models


Skills in evaluating and managing market risk

If you run your business, you know just how it can be vulnerable to the ups and downs of the economy.

Without the right skills to manage and measure market risk, the next recession or technology trend might sweep away your business.

Here are some critical skills that you can learn to help build a business:

  • Expected shortages and other associated risk factors
  • Parametric and non-parametric methods of measurement
  • Model reliability: compilation and copies
  • Model term structure interest rates


Skills in managing credit risk

Business financing can be a bane or boon, depending on how you go about it. The topics below can help you get the most value:

  • Debt analysis
  • Unexpected losses
  • Debt VaR
  • The risk of conflict
  • Debt discharge


Measuring and mitigating operational risks

Operational risk is part and parcel of every business environment. It can result from employee inefficiencies or failed business processes, systems, and procedures.

The topics below can help you stay on top:

  • Risk culture and behavior
  • Enterprise Risk Management
  • Risk planned return to capital
  • Risk of outsourcing


Understanding instruments

Your investment in money market instruments can be prone to risk. Your business’s day-to-day operations may face liquidity risk if assets cannot be converted into cash quickly enough.

The topics below can equip you these situations:

  • Cash flow modeling and stress testing
  • Liquidity portfolio management
  • Cross-currency funding
  • Balance sheet management


Skills in investment risk management

Every investment has a probability of profits and loss. How do you maximize the potential for profits and minimize losses? Become a successful entrepreneur by learning from these topics:

  • Portfolio building
  • Portfolio risk measures
  • Risk planning
  • Risk monitoring and performance measurement
  • Portfolio performance analysis


Thank you!

After learning all these core concepts, you not only increase the chances of running a successful business, but you also acquire the FRM certification.

This is a qualification that can help put you at the helm of any company across the world. Of note:


One step at a time,

The QuestionBank Family