Business Risk Management:
Recent times will evidence that businesses face many risks. These can be either external threats or internal weaknesses that emerge to constrain or impair the success of a business. They will almost always become a barrier to business growth, and cause a whole load of headaches to boot. So, business risk management should be part of your practice and strategic management planning. That way, you will be best placed to address risk as and when it crops up. You’ll also stand a far greater chance of business success in the long term.
Taking some time to implement some business risk management has many benefits. Not only will it enable you to improve your decision-making, but it will contribute towards better planning and prioritisation. A by-product alone is that it will help you allocate capital and resources more efficiently and effectively. Sharpening your ability to anticipate what might go wrong, it will pay dividends in minimising the amount of fire-fighting you have to do. And, should the worst happen, it will help prevent a failure or serious financial loss. Overall, using a business risk management strategy can significantly improve your chances of delivering your business plan outcomes on time and to budget.
You might be planning on launching a new product, or entering into a new market. Whatever your goal, this should be included in a business risk management strategy. You will need to consider the competition in your chosen market. And any breakthroughs in technology that would make your product redundant, will need careful thought. Business risk management should involve methodically identifying the risks surrounding your business activities.
It should assess the probability of events occurring that will have a negative impact, while enhancing your understanding of how best to respond should these situations arise. As such, risk management processes can help you put systems in place to deal with the threats and potential consequences. Overall, you should also gain the ability to monitor the effectiveness of your business risk management approaches and controls. Not only will this allow you to build them into a core part of your business management, but it will allow you to significantly increase your chances of survival should a crisis emerge.
The Takeaway in a Crisis
Many people have been astonished by the varying abilities of companies to cope during the current crisis. It has been a real test of the business risk management processes in place. Those able to swiftly mobilise their workforce to work remotely have reaped the rewards of some very simple risk management strategies. Those companies will invariably have had the foresight to ramp up their technology offering to cater for a situation where staff needed to work from home. What recent events have very strongly reinforced, is that a crisis doesn’t discriminate based on money, or on having the biggest or most well-known business.
If ample attention to risk management planning has not been put in place, the business will suffer. While it is true that those with greater pots of money will likely pull through far easier than those that don’t, what cannot be underestimated is the importance of a business’s reputation to weather the storm effectively. So having the money to survive but having given a poor customer experience based on your lack of risk mitigation, will likely have very long-lasting ramifications once the crisis is over. So, if you haven’t already done so, take some time for some business risk management planning. And, if you don’t know where to start, give us a call. We’d be happy to point you in the right direction!
If you would like to speak to one of our financial advisers, please do call us on 01243 767 469. Alternatively, you can email us from our contact page, and an adviser will be in touch.
Written by Steve Burns
Steve is a chartered financial planner who has been with Lewis Brownlee for over 20 years, who now heads up Lewis Brownlee Financial Services. Under his directorship, the firm has established itself as a specialist provider of professional, informed and impartial advice.