ecently, ( Oct 2018) I asked a question in the Business Group of Australia, about ” what do people see as their biggest business risk at present ” I was glad to see that no one classed themselves as the biggest risk for their Business. Although there were some interesting answers, including the following
- Hit by a bus- this one I will class as Injury or Illness to the Manager
- Quoting or Invoicing wrong
- Spending too much on products
- Downturn or lack of customers
- Trainees, not following company Policies and therefore wasting money
- Not Envolving
- Not being on Line- no website etc.
I might try and look at a couple of the above.
Injury to the owner/ manager is something which can affect the business, especially if the owner is the only person working in the business. However whilst there are insurances which can help the business owner survive, it may or may not ensure the business survives. Having good systems and processes in place is worthwhile, so anyone can come in and pick anything up and operate your Business until you are back on your feet, although you need to ensure you can afford to hire someone as an employee.
Always ensure where possible you have a profitable business, and not just buying yourself as the owner a job, and this way will help should something occur.
Quoting and Invoicing in a lot of businesses are important, as, with these, it ensures someone knows what they can expect to pay for your product or service, and then understand when it is due and what they need to pay.
A well-documented budget can help with this process, however, the important thing before being able to quote for any work is totally understanding your costs to provide either the product or the service. Once you totally understand your costs/expenses you can set your prices to ensure you are always making money, and therefore hopefully being profitable.
Buying too much stock- this one is a difficult one especially when initially starting your business, as really you have no idea on what you are going to be selling. However, I think with good Market research and asking the right questions we may be able to get an idea on what sort of items are going to sell well, as long as we reach our potential clients with our advertising, we can minimize how much we buy of possible the items that won’t well. How good was your market research before starting your business…
Not Envolving is an important one, as we need to ensure we keep up with the current trends within our own particular industry, and if you are not keeping ahead of everyone else you will soon lose the edge and therefore your clients. Professional Development, conferences, reading etc are all vital part of being a Business owner and learning what is happening in your industry.
Lack of customers, can be a difficult one, and all business owners will probably experience this in their business time even if it is just for a short period, good advertising, marketing, keeping up to date with what the client wants, and ensuring your service and products meet the requirements of your potential clients can assist. Ensuring clients can always find you, whether it is word of mouth, facebook, website etc is important.
Staff is always a difficult part, however, you need to spend time with your staff and ensuring they are trained properly and given the right techniques, skills, and information to work in a way you want them to work. Training Staff should be seen as an investment and not an expense, yes it does take time to get them working like you want them, and it can be cheaper to train them and keep them than to have to train them, watch them leave and then have to recruit more staff.
Whilst I find it interesting, there was no mention of any of the following,
- loss of data- computer crashing
- Break-ins/ security issues
- A fire of a premise losing everything
- No power or phone lines for several days.
- Roadworks in the area, stopping vehicles and pedestrians getting close to your business for a few days
- Government changing legislation/ regulations which might affect your industry.
- Bad press/ media about your business.
Any of the above should be included or at least considered as part of your Business Continuity Plan which every Business owner should have in place, remember a documented plan means anyone can pick up the plan and understand what needs to occur should something happen.
A good Mentor, Accountant, Coach, Risk Assessor, Insurance Broker, Business Continuity Plan consultant can be beneficial for your business and can assist you in ensuring you can minimize risks to your business or even help to eliminate the risk to your business, however, the important part is you know how you are going to react should something occur.