When we start our business, we think of our risks of being Not having enough clients, or not having sufficient cash flow for the business to operate, causing the business to fail.
Often we take out insurance for our business, not based on any actual risk assessment we have completed, however often because it is either legislation for our industry, or others tell us we must have the insurance, or yes it might protect us against something that goes wrong, or we give the wrong advice, often we don’t fully understand or comprehend what this actually means until our business has been going for a while.
For example for some industries, we are told we need to have a qualified First Aider in the workplace, with a Nationally Recognised qualification, however, we are not always told how many we need, or whether we need a First Aid Room, or how many First Aid kits we need around a building/ factory/ Office. We only work this out by doing an actual risk assessment of what sort of injuries can occur, how frequent they can occur, how close is the nearest Medical clinic/ doctor/ Hospital/ Ambulance, and then we can decide on what we need, also part of this is understanding what type of equipment/ tools, etc we have on-site, and what sort of protection the tools have on them. However remember the legislation or the risk assessment might suggest how many First Aiders we should have on-site, however, there is nothing wrong with the company having more qualified First Aiders on site, than required.
A Licensed Gaming Venue, for example, might have a risk to their business, if the Government changes any Legislation in relation to gaming machines, etc which might affect their annual turnover, so, therefore, relying on one form of income is not a smart move, and many do it, they focus on the gaming aspect and spend less time on the Bistro/ Food part of the Business, and therefore their income on food is way less than it could be.
Is there legislation that can affect your business operations, do you know the legislation which applies to your industry/ business.
For those who employ Staff, we may consider one of the risks is an employee getting up and leaving, and what information can they take with them, not only in a physical item manner, but in what knowledge do they have, and who else in the company has the same knowledge to keep the department running. However one of the other risks which can occur with employees is during Flu season, where the majority of your office staff may suffer from the flu at one time, and therefore you have an office with no to minimal staff, therefore how will your business continue when this occurs- do you use contractors, does your industry have an agency you can call on for replacement staff, etc.
We all have the normal risks to the Business, with computers, which can die, crash, get attacked with viruses, etc, so we need to think of our disaster recovery plans, and how are we going to respond to this, which might result in lost data, downtime of the business, etc, although another thing which can occur is a security break-in when our computers are stolen and therefore all our data might be lost, or other damage to the premises which resulted in the business being unable to trade for several hours- yes insurance helps in this area, however, can take a while for an insurance assessment to be completed.
Although I have mentioned some of the issues which can occur, however, I am sure we can all think of other issues which can occur within our industry, business operations which could make it difficult for the Business to continue and earn an income, as we all know the expenses keep coming in and don’t stop.
When we start a business we don’t all have training in Risk Management, or OH&S, etc, and therefore we are unsure of how to do a full risk assessment, my suggestion to anyone, is to hire a Risk Assessment consultant, who can have a holistic assessment of your business, including where it is today and the direction it is heading and estimate the types of risks which might occur in the future. However I understand not everyone has a budget for this, you might find discussing risks with your mentor or coach might be able to identify some of the possible risks, or if you have an Advisory Board they may be able to assist you with a workshop type event, or if you already have staff discussing with your staff and asking their input about possible risks they can all identify within the business operations. We can also talk to our insurance broker, who might be able to consider possible Risks in which they have seen within other businesses in your industry, remember insurance brokers see a lot and deal with multiple Business owners, and possible industries and therefore have an understanding of what can happen, and what insurances your business should have in place and how best to protect your business. It is easier to take out the right insurances, and ensure the Policies meet our requirements if we understand the risks which can arise for our business.
So Act this month, think about how are you going to do a Risk Assessment of your business, and what resources do you need or are you going to use to achieve this.