Risks are inevitable. Whether in life or in business, things happen that we can’t control. What we can control is how we respond to those events and occurrences.
Managing small business risks is often as simple as having someone else to open up for you if your main key-holder is delayed. Or having somewhere to divert your phone to if you’re unavailable. Or having a back-up plan in case your broadband service fails. These things might not initially seem worthy of a full risk analysis when compared to the risks faced by bigger organisations. But, if any of them actually happened, do you know how you would deal with them?
In its ISO 9001 definition, risk is the effect of uncertainty.
Not many of us have a crystal ball handy to gaze into and predict the future, but we can consider things which might reasonably happen.
In my earlier blog on risk management, I talked about risks in relation to quality and how they can arise internally and externally to your business. One really easy way to identify risks is simply to think about, and list, all the things that could realistically go wrong which would upset your customers or leave you unable to carry out your business.
- How much do you rely on your utilities services to be able to function?
- What would happen if a ‘flu epidemic wiped out half your employees for a week?
- How would you carry on if your landlord served notice on your business premises?
Using my tips on the Process Approach may help to identify where risks occur in your business processes.
Your own attitude to risk will differ from someone else’s so any steps you take to address risk may also be different. There is no one-size-fits-all approach.
Having said that, a fairly common method is to assess the likelihood of the risk occurring and the severity or impact if it does. You can score these out of 3 or 5, depending on your preference. Then multiply the likelihood by the impact to reach the overall risk score.
You decide the score threshold at which you need to take action to reduce or mitigate the risks. Anything above your threshold will need some action.
Considering plan B
The way you counter these risks may be different for each one identified.
Having a back-up plan for agency staff resources may be enough to satisfy the risk of large scale sickness absence. Or you could decide to provide everyone with a ‘flu jab each year. The point is that it’s up to you.
If access to the internet is essential to carrying out your everyday business activities, you may consider investing in a mobile broadband unit on a pay-as-you-go or a pay monthly contract. One of my clients did this just recently as a result of our earlier session on risks and opportunities. They even got to use it much sooner than expected when their office broadband failed.
The business benefits of managing risks can be diverse. Whether it’s managing supply your chain, ensuring profitability, securing funding for your next project through good governance and robust risk management or simply helping you sleep at night, taking action is the most positive step you can make.
This article has been written by Lucy Payne of valeqms.co.uk