Many business owners target most of their focus on business profits and moving the business forward. While these points will always be a top priority, owners and managers also need to think about and understand the various risks a business can face. After all, if any of these risks eventuate and create a major problem, it will affect the business and, ultimately, its cash flow.
When running a business, it’s only natural to want to think about all the good stuff, rather than focusing attention on what could go wrong. Having said that, risk management is not about negative thinking. It’s more about being aware of what potential problems the business could face and putting plans in place to prevent those problems. Overall, risk management is a very positive process and healthy for business. Investing in quality enterprise risk management software will make the task of risk management so much easier.
Let’s look at some things that can happen if a business owner doesn’t divert any attention to effective risk management.
There Is the Risk Of Physical Injury
Anything that can affect your business is not good, but one of the worst-case scenarios is an injury happening within the workplace, either to a staff member, a customer or a visitor. Accidents do happen but in reality, many accidents can be avoided.
One very simple example of an accident that can easily be avoided is a slip and fall accident. In this case, there’s a wet patch on the floor, either from something leaking or a floor that’s just been mopped. To avoid an accident, usually, all it takes is to place one or more warning signs near the slippery area so everyone is aware of it. This is just one very basic example, but it illustrates the point.
The potential for accidents and physical injury should be a top priority in the risk management plan of every business.
It Can Result Into A Loss Of Business Income
Failure to recognise risks when it comes to the operational processes of your business could result in downtime and a loss of business income. In turn, any downtime can potentially repel customers or see you missing out on gaining new business.
Downtime isn’t the only consideration here. If the way work gets done is not as efficient as it could be, the process will be slower and will take more time. Everyone understands that time is money, so the longer it takes to do a task, the less profitable it will be.
Risks in business are not always about accidents or incidents occurring, equipment breaking down and so on. It can simply be a matter of the way the things are getting done is not efficient enough.
The bottom line of any business is to make a profit, so attention needs to be paid to the way business is conducted. Can processes be streamlined and improved upon without cutting corners? That’s a pertinent question that needs to be asked.
You Could Find Yourself On The Wrong Side Of the Law
Every UK business will have certain regulations and guidelines it needs to adhere to in order to remain compliant. These laws are designed to help prevent workplace-related incidents, as well as offering protection for business owners, workers and customers alike.
Risk management also includes compliance management, maintaining a safe work environment and submitting incidents reports to governing bodies should a mishap occur.
If your business practices are not compliant with the law, this could lead to you receiving one or more fines, or the possibility of having your business shut down completely until you can get things in order. Neither of these scenarios is something you want your business to face.
It was mentioned in the introduction about risk management software that can assist you in every facet of risk management. These programs will often also include modules for compliance management, simplifying the task and enabling your business to maintain compliance at all times.
Risk management and the implementation of systems to manage risk is a vital component of every business, large or small. There are many positives to be gained by focusing attention on managing risks, which will help you avoid the repercussions discussed in this article.
To learn more about risk management, it might be wise to consider enlisting the help of a risk management professional.