Put plans in place to reduce risk

The fact that your business is running smoothly and making a profit does not mean it is immune to risk.

The fact that your business is running smoothly and making a profit does not mean it is immune to risk.

Risk can come in many forms and it is crucial that you have a risk management plan for your business.

The risk management plan is equally important to a business plan.

Even before starting operations, it is important for any business owner to take a look at his or her business and think of the risks or dangers the business might face or which could disturb its operations.

You should be able to identify the top five risks that can afflict your business.

This should include technical, business or process risks.

You should also decide what steps can be taken to respond to those risks.

Risks that a business owner might have to think of:

l Financial - where clients might not pay invoices on time.

l Operational - things that could disturb production.

l Human resources - people, employment laws, illness, occupational illness, etc.

l Equipment - failure, damage, loss, and any other factors that might bring your business to its knees.

Take the Eskom load shedding problem, for example. It is doing a lot of damage to businesses that never thought the country would ever face such a problem.

Many businesses don't have a back-up plan when the power goes and this affects production.

This wouldn't be happening if the risk management plan was in place.

Many companies don't have electricity generators, which could be attributed to the lack of risk managers within those businesses.

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