| How often have you regretted not taking simple | | | | you need to evaluate and prioritize them. Risks that |
| precautionary measures which could have prevented | | | | have an impact on the ability to continue business, |
| a sizable loss or inconvenience in your business? | | | | financial well-being or the image of the company, are |
| Whether it's ensuring that the anti-virus software is | | | | naturally the most critical. Others like an unanticipated |
| updated or the fire alarm system is in place, most | | | | interest rate change or a strike at your local bank will |
| businesses have a need to protect themselves | | | | certainly have an impact, but are still manageable. |
| against unpleasant circumstances. Small wonder, that | | | | Reduce risk: While you can never avoid risk |
| management of risk is a scientific and very critical | | | | completely in your business, you can certainly |
| business process. | | | | mitigate it. Hence, it is sensible to institute suitable risk |
| Risk is defined as the probability of something | | | | limiting measures. While you may argue that higher |
| happening that will have an impact upon your | | | | the risk, higher the return, it's important to ensure |
| business. It is caused almost exclusively by people, | | | | that you take only calculated risks in business. |
| processes, procedures and natural events. When | | | | Decide on a plan: Since many technical solutions are |
| there is a possibility of loss, destruction, injury or | | | | available, you need to select a suitable risk |
| disadvantage, it is termed as risk. | | | | management process and implement it thoroughly. |
| Risk Management is a continuous process of planning | | | | Choose the most appropriate strategy for your |
| risk control. It involves a careful examination of what | | | | business taking into consideration the cost and time |
| you can do when something goes wrong, and | | | | required for implementation and resultant benefit. |
| understanding whether you have taken enough | | | | Review the program: Your risk management process |
| precaution or should do more to prevent harm. | | | | has to be constantly reviewed in order to ensure |
| The following steps will help you manage risk in your | | | | that it serves the desired objectives. Set aside a |
| business. | | | | budget for periodic upgrades. |
| Identify risk: It's time to wake up and smell the | | | | Create awareness: This is possibly the most |
| coffee. Start by examining all likely sources of risk. | | | | important yet neglected part of the risk management |
| Think of it as a "what if" analysis. Ask your | | | | process. There's no use in having an elaborate plan, if |
| employees about the major risks they face in their | | | | no one knows about it. Ensure that there is adequate |
| functional areas, and what remedial measures are in | | | | communication to the staff about the procedures to |
| practice. You can do this through brainstorming | | | | be followed in a situation of risk. This is particularly |
| sessions, random inspection or audit, conducting a | | | | important during times of disaster, like an earthquake |
| SWOT analysis and so on. This will enable you assess | | | | or fire. |
| your company's level of preparedness to manage | | | | The risk management process is an ongoing one, and |
| risk. Books such as "The Risk Management Process: | | | | must stay in sync with your business' life cycle. All |
| Business Strategy and Tactics" and "Auditing the Risk | | | | successful companies have a risk management |
| Management Process" from have a wealth of | | | | program in place, for eventualities ranging from |
| information on this subject. | | | | natural calamities to security threats. Make sure your |
| Analyze risk: This is one of the major steps in any | | | | business is well prepared to handle any unfortunate |
| risk management process. Having identified the risks, | | | | circumstances. |