Identifying business risks as an entrepreneur is one of the most important things that you can do when running a business. Since risk takes many forms and can range from a minor issue to something that can threaten the life of the business itself, it pays to know how to point out risks of all flavors and address them accordingly.
But what can you, someone who doesn’t have the benefit of years of experience in running a business, do in order to find that risk and make sure that it doesn’t threaten your company? This post will explore your options in identifying business risks and show you just how to be prepared for action when you do expose risk. Let’s get started.
Knowing What to Look for and Where to Look
At its core, risk is what happens when you have a chance to lose something. In the context of running a business, these chances for loss can apply to areas like your property, employees, and assets, among other things.
Risk is especially a problem for newer businesses like yours simply because you haven’t had the time to build up the kind of notoriety that can bring in growth and revenue that often defines a successful company.
So it’s especially important that you know what you need to do in identifying business risks when address them as soon as possible. So where should you look?
Start with Your Employees
Your employees are the link between your company and your customers, so it makes sense that they are considered to be one of the most important parts of the business.
If you want to identify risks concerning your employees, then you want to look at key areas like:
- Clarity of responsibilities
- Satisfaction with the jobs
You want to make sure that a person that you hire is capable of doing the job with which he or she is assigned, but beyond that, you also want to be certain that they know what their overall role in the organization is.
On top of all that, you want to ensure that their performance is all that it can be by gauging their satisfaction with the job. This can usually be accomplished in any way ranging from the occasional, informal chat that allows you to connect all the way up to a regularly scheduled formal review that shows the employee how he or she did over a given period of time.
By managing your employees successfully, keeping their training up-to-date and ensuring their happiness, you can look forward to successful operations that will extend to happy customers.
Make Sure Your Planning is Ironclad
When identifying business risks, you always want to make sure that you have a strong business plan in place. I can’t stress enough how important it is to develop a road map before your proceed, to constantly consult and, if needed, alter those plans as you move forward.
By having a business plan in place, you not only establish a clear goal that you can guide your company toward, but it may help in identifying business risks by giving you insight into future plans that might not currently work, depending on the current course of the business.
With everything you put into your company, it wouldn’t make sense to risk the entire operation by not having a plan concerning where you want to be and when you want to be there. You can avoid that risk by having the right the kind of strategic planning in place.
Maintain Your Relationships
This aspect of identifying business risks is something of a combination of the first two that I’ve mentioned, because it revolves around planning on staying in touch with some of your most important business-related lifelines.
Namely, your partners and your lenders. When it comes to your business partners, think about people like your suppliers and how they provide a service that’s crucial to running your business successfully.
You want to make sure that the relationship you share with them is always mutually beneficial, because losing their support will impact your ability to serve your customers and that, in turn, could threaten your standing in the marketplace.
Likewise, identifying business risks means maintaining strong relations with your bank and other important sources of capital. The right planning will make sure that your lenders see a return on their investment, which will then open the door to future opportunities to access capital.
This means that you will always have a source of funding to carry out operations, which is something that could easily come in handy should you want to expand, introduce new products, or do anything else that will take your business to the next level.
Keeping Risk Low for a Growing Business
When identifying business risks, these are just three of many areas that you can explore in order to get things done and make sure that your operations run as smoothly as possible.
It takes a lot of hard work and dedication to make sure that any risks to your business are addressed in a timely manner, but it’s all worth it to see your company grow.
Getting an expert opinion on identifying business risks is another action that you should consider, as an objective, outside opinion may be able to point out areas of risks that you might be too close to notice.
Whatever you end up doing, remember that it’s all for the benefit of your business, your employees, and your customers, and you’ll be able to reach success before you know it.
Remember, running a business successfully does not need to be complicated. Keep it simple!
For more ideas on how to grow your business profitably, please check out our website at www.portalcfo.com.
Manny Skevofilax is a consultant and speaker that helps his clients successfully navigate the challenges of growing their businesses profitably. Since 2003, Manny helps businesses enhance their results by using his experience in strategic planning, financial statement analysis, operations, organizational development, and team-building. His consulting firm, PORTAL CFO Consulting, Inc., has attracted clients from diverse industries in the United States and abroad.
Manny can be reached at 410-808-3441 or via email at email@example.com.