Running your own business can be both stressful and exciting. By considering potential risks or events before they happen and having a risk management plan in place, you can save money and protect your business’s future.
“Business as usual” could be affected by an unexpected event such as a natural disaster, theft or even injury to staff, customers or visitors to your premises. If you are not sufficiently prepared for these events, it could cost you dearly or even cause your business to shut down.
Risk mitigation basically means that you are prepared for the unexpected as far as possible and that you minimise risks and extra costs as far as possible. A business or organisation should make a realistic evaluation of possible risks and their severity – and plan accordingly.
The risk management process can be as easy as answering the following few questions:
- Identify what could go wrong. Risks can differ according to your workplace environment or to the particular business you are in. Identify what could possibly go wrong in your business – those are your risks. Properly conducted risk surveys offer a valuable and independent review of the risks involved.
- Analyse how it will affect your business.Consider the probability and impact of the identified risk(s) to your business operations.
- Decide on what should be done.Once you’ve identified the possible risks and how could possible affect your business operations, develop a contingency plan in the event that the risk does transpire. How will losses be recovered?
Listen to MiWay’s Head of Business Insurance, Morné Stoltz, as he discusses the importance of managing risk. He states that “The survival of small businesses largely depends on their risk management approach”.