How to Incorporate Risk Management in Your Business Plan

Every time a person starts a business, they never think that theirs will be the one to fail. And yet the reality is that over half of all companies end up closing their doors after only five years of opening them. A big part of that is because as entrepreneurs are putting their business plan together, one thing that they forget to incorporate is a risk management strategy.

If you’re a business owner and you’d like to know about some of the things you can do that will prevent your company from incurring a lot of risk, here are five types of risk that you should always prepare for:

Minor risks. Minor risks are the ones that happen to people even when they try to avoid it beforehand. For instance, if you’re on your way to a business meeting and you get a flat tire, that isn’t your fault. However, there are things that you can do to make dealing with that a lot easier. You can have a good spare in your trunk. You can know how to change your tire. You can also have a staff member on call just in case they need to pick you up. Another example of a minor risk is having your smartphone go dead in the midst of a conference call while you’re away from your office. A car charger and additional battery can make it easier to get connected in no time.

Annoying risks. Say that you’re printing off a big report and your toner runs out of ink. Or maybe one of your employees has some soda at their desk and accidentally spills it all over their laptop or desktop. These kinds of risks would be considered annoying more than anything else. The good news is that they are also preventable. By creating a staff booklet of rules that says things like “No eating or drinking at your desk” and “Make sure to check the printer at the end of each day,” these types of issues will cease to be a problem.

Insurable risks. One thing that you don’t want to risk experiencing is someone having an injury or some of their property being damaged, and you not having general (or professional) liability insurance to cover the costs. Although insurance is an additional expense, it’s one that you don’t want to go without – ever. You can read more about general liability insurance by going to SBA.gov and putting “general liability insurance” in the search field.

Financial risks. Say that you decided to consult with someone who works for a financial services company like Chartwell Compliance about something else that you should keep in mind when it comes to avoiding risk management. Something that they would probably tell you is to put a plan into place as it specifically relates to financial risks. You should hire an accountant. You should open up a business account. You should have accounting software at work. You should put your profits back into your company. You should also know how to do online banking safely. You can read more about how to do that by going to Naked Security and putting “safer online banking” in the search field.

People risks. If you’re not careful about who you hire to work for your company, you’re definitely making yourself vulnerable to experiencing what are known as “people risks.” Non-qualified people tend to not be as productive, and they oftentimes provide poor customer service which can ultimately affect your bottom line. Therefore, be selective in the hiring process and make sure to do extensive training once you hire individuals. For tips on how to hire the best employees for your company, visit Robert Half or Corp Magazine and put “hiring the best people” in the search field.