All business involves risk. From natural disasters, such as fire and flood, to theft, or building works on your doorstep that disrupt your trade. It’s impossible to predict, let alone prevent, all future risks.
But there are key steps you can take to reduce the impact on your business. Do it right and you won’t just survive, you could thrive.
1. Identify your risks.
The first thing to do is to compile a list of risks you could potentially face. Every business is different and so are the risks they face. For example, if you run a retail food outlet and rely on refrigeration, then a power outage could result in stock losses. Worse still, your customers could suffer from food poisoning. Or if you run an online business and your internet connection is down for hours or days, you risk losing business and customer goodwill.
As well as physical risk to your business property, employees or clients, think about potential disruption to the market you operate in and less tangible things, such as risks to your business reputation.
2. Managing risks.
Once you’ve identified your risks, it’s time to put in place some strategies to manage them. The best time to consider your risk management strategy is when you draw up your business plan. Don’t forget you will need to revisit your risk strategy as your business grows.
You can also cost-effectively reduce some risks with simple actions, such as backing up your computer data, installing smoke alarms or providing your staff with safety training. Likewise you could also consider outsourcing tasks, such as bookkeeping or computer networking, to reduce your risk of costly errors or malfunctions.
3. Cover all bases.
Most people understand the need to insure their business assets, such as buildings, contents and motor vehicles for events such as fire, theft or damage. But business interruption insurance is arguably just as important. This helps cover any loss of revenue if you are prevented from trading due to an unforeseen event. It also provides cover where you cannot access your premises due to damage to adjoining premises.
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Every business is different and so are the risks they face. Don’t jeopardise all your hard work by failing to take account of the risks. With a bit of thought, and help from experts, you can put a plan in place to help you bounce back if disaster strikes.
VIA – steadfast.com.au