No business plan is foolproof. Like everything in life, owning and managing a business comes along with its own complex set of risks. But what’s important is that business owners realise these risks and understand which business and financial choices are viable for the success of their business.
What is considered as a Risk?
A risk could be any event that affects your business in a negative way. Each and every business will have their own unique set of risks. There are several different risk categories that include:
- Strategic- plans and decisions that affect your business
- Compliance- laws and regulations that need to be adhered to
- Financial- all the financial procedures and structures within your business
- Operational- the management and operational overseeing of the business
- Environmental- the many external factors that could impact your business
- Reputational- the reputation of your business
There are still many other risk factors which have not been mentioned. Some examples include the health of your employees, risks with investing, and the safety of your premises among others.
Creating a Risk Management Plan
The only way to fight against unknown risks of the future is to have solid risk management plans in place so that you are prepared for a variety of eventualities. There are four main steps to creating a plan, which includes:
- Identify- Make a list of the dangers that you feel your business is most at risk of. It’s important to view your business from all angles.
- Assess- The next thing to do is inspect each risk and work out the most likely details as to how each risk could occur.
- Manage- Once you have an idea of your business risks, it’s time to attempt to reduce the impact of these risks as much as possible.
- Monitor- Keep track of your risk management plan and add new plans as your business changes and develops.
Need some help with assessing your business risk management? Here at The Wealth Mentor, we have a team of experts ready to assist you with risk management, property investment and insurance. Feel free to get in touch with us today to book a consultation.