The process of identifying risks, assessing risks and developing strategies to manage risks is known as risk management. A risk management plan and a business impact analysis are important parts of your business’s continuity plan. As you start fresh in 2018, also begin with a fresh, risk management plan as well

Today, Promotional Consultant Today kicks off a three-part series on risk management that will help you to identify areas of risk, understand the business impact and give you steps to create an action plan, as shared by Queensland Business, a web portal for small businesses.

Identify risks to your business. The first step in preparing a risk management plan is to identify potential risks to your business. Understanding the scope of possible risks will help you develop realistic, cost-effective strategies for dealing with them. Risk can be identified in multiple areas. Of course, there’s risk of natural disaster, risk of theft, risk of data breach or market competition, but push your team to identify other risks as well. Is a major vendor contract up for re-negotiation? What impact could this have on your production process? Think broadly when identifying risk.

Assess your business. Review your business plan and think about what you couldn’t do without, and what type of incidents could have an impact on these areas. Ask yourself:

  • When, where, why and how are risks likely to happen in your business?
  • Are the risks internal or external?
  • Who might be involved or affected if an incident happens?

Also, ask your team these “What if…” questions to identify risk:
What if…

  • you lost power supply?
  • you had no access to the internet?
  • key documents were destroyed?
  • your premises were damaged or you were unable to access them?
  • one of your best staff members quit?
  • your vendors went out of business?
  • the area your business is in suffered from a natural disaster?
  • the services you need, such as roads and communications, were closed?

Brainstorm. Next brainstorm with different roles in your organization, such as your chief financial officer, your staff, your suppliers and other roles. This will give you different perspectives on where risk is lurking in your business.

Analyze other events. Another great way to identify risk is to look at other events that have taken place. What were the outcomes? Could this happen again? For example, if your business had been impacted by Hurricane Harvey, what would that have looked like? By looking at these scenarios, you can identify external risks to your business.

Assess your processes. Also, review your work processes. Identify each step in your processes and think about the associated risks and disruptions, and the impact to your bottom line. Ask yourself what could prevent each step from happening and how that would affect the rest of the process.

Consider worst-case scenarios. Finally, look at the worst things that could happen to your business. The worst-case scenario could be the result of several risks happening at once. For example, there could be a natural disaster which would cause shipping to be unavailable for some time, which would delay orders and cause customer inconvenience.

PCT returns to your inbox on January 2 when we’ll take the next step in risk management to analyze the likelihood and consequences of each identified risk and options for managing them. Until then, have a happy and prosperous New Year!

Source: The www.business.qld.gov.au site is a portal to help Queensland businesses improve their operation at all stages, from starting and running, to growing a business. It provides information, support and tools for Queensland business owners and industry sectors.