Whenever you start a business you start to encounter risks. It is unavoidable. If you ignore risks, then you have created a situation that could severely damage your business. So, what can be done in order to protect your business and help you to succeed and reach the goals your business has.
The only thing you can really do you can sit back think about what the business does and what could bring the business to a point where damage could be done to it. That’s huge right? So the answer to “how do I do that”, is one step at a time.
Every business is unique so there is no magic formula to solve this conundrum. Irrespective of any qualifications, or certifications, you may want to achieve there are a few areas you can look at to help decide where to. These include; a) your strategy, b) your finances, c) how you do things (including how you operate, how you protect data, how you maintain quality etc.), d) Who you employ, or subcontract to, e) how you comply with any legal obligations your business has, f) how you want to protect your reputation, g) health and safety.
Likelihood and Consequences
As these types of risks will exist, no matter what you do, you should think about how likely one of the subjects listed above will provide you pain, in some way shape or form. It is obvious that you have to pay your way in business. However, your finances are subject to late payments, non-payers and rising costs. How do you go about limiting the risks your business faces when trying to make sure it can pay its way.
The process is similar for every one of these subjects. How likely is it that something will happen in one of these subjects. Then think about how will it hurt you and how much will it hurt you? (the consequences). These two elements can be used to calculate a risk score for that topic, or activity (yes some things do need to go down to that level of granularity).
The risk score is often the item that dictates what gets tackled first. There is no harm in that and some risks, like cashflow and profitability, are always changing. We believe that the trick is to start with something you know well (and would probably cause you the most pain) and then move on to the things you know less about. For the things you know less about it is perfectly acceptable to bring in someone who knows more than you do to help you to identify the likelihood and the consequences.
Key things to think about when considering likelihood and the consequences of risks becoming a reality are:
- How likely is it that your risk may occur.
- How much would it hurt you.
- Who or what could be affected.
- Could the business recover – if so how quickly.
- What the legal, financial, safety and reputational impacts.
- Can these events be repeated.
Helping Them Not Happen In The First Place
Identifying what the most prone elements of your business are is the first step in helping them not happen in the first place. The more you identify, the better your business will be protected. It is true that some risks can be covered through insurance, but you also have to do your part to enable a successful claim. You have to create policies and procedures to outline your approach to these risks. When you apply for many of the certifications, you need to provide proof that you have assessed the risk through the production of a matrix against that risk.
The job of the policies and procedures is to create the controls that make sure you are doing your part to mitigate risks as much as possible. The supplemental bit is providing training to your employees, and maybe subcontractors, so that they understand what the policies and procedures are saying and how they protect both them and the business.
The next piece of the jigsaw is monitoring what is going on. This is management’s responsibility. They must devise, and follow, a way in which they can assess whether the risks are being suitably controlled. There are many ways in which management can monitor the intentions found in policies and procedures, so we will not go into detail about that here.
The most important thing is that monitoring what is actually happening creates dialogue between management and those completing the underlying activities. This is the best way to be able to monitor the effectiveness of what management have intended to create. But things always change!
Thinga Always Change
It is an unavoidable fact of life that we live in an ever-changing world. But how much do we really learn from what happens around us? If people are leaving your organisation too often what is going on? Do people always want to take a shortcut to the end of their current activity, which you pull them up on, or is there something else they don’t like. Do they feel that you do not protect them enough from what could harm them?
At a higher level, laws are always changing. How do you cope with staying on top of the various legal requirements your business has to bear in mind? Also, the experiences of competitors can provide clues as to what you should now be adopting. How do you find out about such industry specific information?
The answer to these questions may lie in the people you engage with to complete the activities you rely on to remain safe. By this we mean keep your levels of risk to an acceptable level. Are your risk assessments realistic? Are your training practices still relevant to your industry? Are you employing the right people to get your underlying activities done? Are you, as senior managers up to the task?
We think there is a fair amount of useful information in here, but based on my previous blogs, some may consider this one is quite light on detail. Please look through the other blogs here Blog – Eye Bray Limited. The information you want may well have been provided already. Some of what I provide is very detailed.
We would be pleased to answer your enquiry through email at enquiries@eyebray.com, by calling 0743211611, or by using https://meetings.hubspot.com/eyebrayltd to see when I am free.