If you currently own or are thinking of starting a small business, you should be aware of the most common risks that small business are faced with. This enables you to be better prepared, and deal with these risks appropriately. Here are some common risks and how to manage them.
You need to be aware of the following risk categories:
• Strategic Risks – associated with operating in a particular industry
• Compliance Risks – the need to comply with laws and regulations
• Financial Risks – risks associated with the financial structure of your business, and financial systems you have in place
• Operational Risks – associated with your businesses operational and administrative procedures
• Market/Environmental Risks – external risks that your company has little control over
There may e a time where a risk overlaps a couple of these categories. For example the protection of confidential information could overlap with compliance category as well as the operational category.
The most common risks that small businesses suffer from are:
• Breakdown of machinery and equipment
• High staff turnover or loss of a key staff member especially if they have unique skills
• Negative cashflow
• Internet connectivity
• Consequences arising from lack of innovation
• Increased competition
Risk management is the process in which you identify, assess and treat risks that could potentially affect your business operations. This should be a central part of any organisations business strategy. This is not something you can do once, and then forget about it. It should be a continuous and developing process, but it is well worth it to save your business from potential risks.
Here at the Quinn Group we can help you with any queries you have regarding risk management for your business. Give our experienced lawyers and accountants a call on 1300 784 667 or submit an online enquiry.