As a business owner, it’s important to manage risk. From the risks associated with scaling the business to the physical risks of the office premises, you have to be on high alert if you want to avoid any litigation or financial implications. This guide will look at some of the key risks that every business should plan for.
Economic Risk
Compliance Risk
Compliance risk is the threat from violations of laws, regulations, codes of conduct, or organizational standards of practice. It can affect a company at an organizational and financial level, not to mention the potential risk to a company’s reputation. As a business owner, it’s crucial to be aware of any compliance risks that could damage a company. Alternatively, if you don’t have the skills yourself, you should hire a legal team to do a compliance check.
Security and Fraud Risk
Businesses handle large sums of money. Because of this, they are always targets for security and fraud risk. This can include cybercrime, employee fraud, and even physical theft. It’s important to review security measures regularly and ensure that you are doing everything you can to protect your business. Even something as small as creating a strong password will help to prevent cyber attacks.
Financial Risk
Financial risk is part and parcel of running a business. You can’t grow a business without taking on some financial risk. However, business owners need to manage this risk to protect themselves and their employees. Before an acquisition or product launch, it’s important to do a risk assessment to ensure that the business is ready for the potential risk of it going wrong.
Operational Risk
Operational risk refers to the daily running of a business. It can include anything from creating an appropriate fire drill in the office to the safety precautions necessary for running a large plant hire company. The operational risk to a business differs depending on what type of business it is. The more physical dangers there are, the more operational risk there is. That’s why it’s important to consider health insurance quotes and provide thorough safety checks.
Reputation Risk
When it comes to running a business, reputation is everything. However, there are plenty of things that could do damage to your reputation, if you don’t manage the risk correctly. For example, if a disgruntled employee decides to sue the company for wrongful termination and you can’t settle out of court, this will do damage to your reputation.
Reputation risk can’t always be avoided but it is important to manage the risk. Looking after employees, ensuring the quality of your products and services, and offering great customer service will all mitigate reputation risk.
