Five ways to help mitigate small business risks
As a small business owner, you don’t need to be told that running an enterprise has its fair share of risks. Learning to deal with them effectively is critical, if yours is to prosper and grow. So, what is risk management and how can you and your team get better at it?
Here are some risk mitigation tips that will help you put your small business on safer ground.
Implement rigorous financial management practices
Poor financial management sees many small businesses fail. From bad debts to cash flow crunches, there are risks aplenty for owners who don’t keep an eagle eye on their incomings and outgoings. You can help your business stay on track by developing a detailed budget, an expense forecast, monitoring your cash flow and building a financial buffer to see you through lean times.
Diversify your revenue streams
Putting all your eggs in one basket is rarely a good idea. Relying too heavily on a single customer, product or service could send your business into a tailspin if market conditions change or your biggest buyer decides to move on. Diversifying your revenue streams can help reduce this risk and make your enterprise more resilient to sudden shifts.
Develop a business continuity plan
Fail to plan, plan to fail, as the old saying goes. That’s why it pays to develop a detailed business continuity plan; one that identifies the key risks that could potentially disrupt your business and outlines how you’ll respond to them. Testing and revising your plan regularly will ensure it remains fit for purpose.
Strengthen your cyber defences
In today’s times, the danger posed by hackers and cyber-criminals is real and rising. Attacks can be disruptive and expensive: in a worst-case scenario, a significant incident could be sufficient to put your small business out of business. Implementing stringent cyber security practices – think strong passwords, multi-factor authentication, frequent back-ups and regular cyber awareness training – can reduce the risk of falling victim to an attack.
Maintain adequate insurance cover
Your business will evolve over time and so should the insurance you invest in to protect its operations and assets. Reviewing your policies at least annually to ensure they’re aligned with your current activities and risk profile means you should have adequate coverage, in the event of an incident.
Enlisting expert assistance
Risk management in business isn’t always straightforward and it can be difficult to gauge whether your mitigation measures are adequate. That’s why it pays to work with a broker who has expert knowledge of the small business sector. Armed with an understanding of your business and budget, we can help you source appropriate, cost-effective insurance cover that will protect your enterprise now and into the future.
“A good broker has relationships with multiple underwriters and insurers and will leverage them on your behalf, to source the best policies at the best prices,” Steadfast Technical Manager Annette O’Brien says.
“It’s a good way to take some of the hard work and hassle out of risk management in business.”
Cover to protect your enterprise in all sorts of times
Being prepared for accidents and incidents is important – and so is having insurance in place to help your business recover, should the worst occur. If you’d like more information on how to manage risk in business, BICS is ready to assist.
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