Chances are, your willingness to take risks has worked out in your favor at some point. Yet our willingness to take risks often depends on the stakes. Naturally, many of us are more careful with risks associated with our businesses. We avoid certain strategies to avoid risks and problems. What does your business have to lose? If you’d rather not find out, take the time now to assess and prevent.
So you have a business plan – that’s great. But after that, you should carefully review your plan and use the goals and data outlined there to formulate a risk management plan. Here, you can identify your risks and begin brainstorming tactics to curb these identified risks.
From there, you’ll need to revisit these plans and update them several times per year at least. Your original plans will remain your blueprint for success, but any changes to your business may need to be added in to keep the plans as relevant as possible. After all, in business, yesterday’s asset can turn into tomorrow’s risk.
Finally, as a general rule of planning, you should definitely procure liability insurance if you haven’t already.
Stay on Top of Finances
At any given moment, you should know exactly how much money you have to work with. How long could you survive on what you have? How would you cover expenses if you suddenly came up short? If twenty percent of your business left today, how long would it take you to fully recover? It can be painful to look, but you should be able to account for most everything on your own at any time, and know exactly how you’ll deal with any hits you have to take.
One of the greatest risk-dampening qualities is strict fiscal responsibility. If you don’t play fast and loose with your cash, your chances of being hit hard get much smaller. This means you have to watch your own business like a hawk; it’s always great to have an accountant or others who oversee certain areas, but that doesn’t mean you let go of the reins.
Turn to People You Can Trust
The nature of risk in business means you should remain skeptical and, in a sense, guarded, but it helps to be able to trust others. They will be able to point out risks you didn’t see coming. This is especially beneficial if you work with or can trust someone who is more experienced than yourself.
You can also look into upgrading your own skill set or that of your best staff with something like risk management certification. In fact, depending on your business, it may be a good idea to have everyone in your upper ranks reeducated to assess and prevent any risks. Casting a wider net in terms of individuals looking out for your business obviously, reduces unforeseen losses and snags.
Taking a proactive stance against risk doesn’t mean that you’ll never take a risk in the future, it just means you’ll have everything you need to come out on top.