Every business, large or small, from the sole trader through to large corporations, faces a variety of risks that can affect business income or even the safety of workers and customers. It’s important to be aware of the risks and discover ways to counteract them before they become a major problem.
Prevention is always better than looking for a cure, so let’s cover some ways you can reduce the risk factor in your business.
#1 – Never Think Your Business Is Without Risk
Complacency and erroneous assumptions are ingredients that will increase the likelihood of problems, so you don’t want to be guilty of either.
If you go about your daily business believing it faces little or no risks whatsoever, then you’re not likely to recognise potential problems and be able to nip them in the bud before they explode into a major issue; an issue that could cost you money or even get your business shut down.
Being diligent is one of the best forms of defence.
#2 – Analyse Your Business Processes
Fully understanding how every aspect of your business operates will arm you with the knowledge you need to more accurately lookout for potential risks. This process might be relatively easy if you’re a sole trader or employ just a handful of staff, but to fully analyse a medium to large business or corporation, you’ll need help from your staff or a risk management professional.
Until your business operations are broken down and fully understood, you can’t know what to look out for when it comes to avoiding potential risks and problems.
#3 – Diversify Your Income Streams
It’s always risky to rely on a sole source of business income, so wherever possible, add more income streams to your business. What this does is reduce the risk of your cash flow completely drying up should one arm of your operation stop producing for whatever reason.
Having multiple sources of income is always way less risky than a single income stream, and it’s something every business should strive for if you want financial security and backup income.
#4 – Employ a Risk Manager
If you are a small business operator, then it’s probably not financially viable or even necessary to employ a qualified and experienced risk manager full-time, but for businesses that range from medium-sized to large, then this can be one of the best business decisions you’ll ever make.
Having a risk manager on board will vastly reduce any instances of problems arising, as they’ll be monitoring, planning and observing business operations constantly. Risk managers are detail-orientated and will readily recognise anything that could cause a potential problem for the business.
Risk managers can also train other staff members on the fundamentals of good risk management, so all of your employees are on the ball and keeping a keen eye on things.
To help out your risk manager, invest in some quality risk management software.
#5 – Risk Management Software Tools
Buying and installing enterprise risk management software, also known as ERM software, is the way to go. This will arm your risk manager and staff with all the tools required to monitor your IT systems, business operations, delivery schedules and so much more.
You can even have your software tailor-made for your industry and your business specifically, by getting in touch with risk management professionals who create this type of software.
At a glance, your risk manager can monitor everything and perform analysis and reports regarding business processes. Risk management software also helps those in charge adjust things where necessary and make more informed business decisions.
#6 – Understand Compliance Within Your Industry
This will be another task assigned to your risk manager. Every industry in Australia has to be compliant with the laws and guidelines that govern that industry. To avoid potential lawsuits or having your operation shut down for noncompliance, it’s vital that you understand the law and bring your business operations in line with it.
Your risk manager, armed with software, will be able to ensure your business is always compliant, thus eliminating risks in this key area.
If you make it a point to be aware of potential risks, seek them out, then nip them in the bud before a problem results, there’s no reason why your business shouldn’t be relatively risk-free.