The above bulleted list is a very short summary of the most common risks small business owners face. Most of this list can be mitigated through insurance. Consider a “Key Man” insurance policy to insure against the lost of a top-tier manager. If someone slips and falls then you can insure against that too. Natural disasters like floods and fires are often insured against through many of the most recognized insurance providers.
Buying insurance is easy. Some risks are not so easily reduced. Theft, debt, and new competitors generally not something you can insure against. These risks must be resolved with strategic planning. You can reduce theft by designing your store to reduce the chances for a thief. Debt is something that you can simply avoid with improved financial management. Accept that new competitors is a risk that we all face. Treat your customers well. Constantly innovate to stay ahead of trends. Research your niche well and often.
The Breviary: Business risks are part of the life of every entrepreneur. The smart business strategist is one who researches the risks, accepts reality, then takes steps to reduce the chances of every possible scenario. Be smart, be strategic, be sustainable.
Image Credit: © Ivelinr | Dreamstime.com – Risk Management Flow Chart Red Marker Photo
Business risks is an important part of any strategy for sustainable success. Your primary goal in risk management is to protect the strategic advantages within your business. Reduced risks means increased chances of reaching destination success.
There are endless types of risks for the small business owner. We will not cover all of them here. There are some types of risks that you can mitigate through proper planning and some that you can mitigate through tools like insurance. Business risk evaluation is also an important part of any small business plan creation. The risk management process is generally covered in five steps which we will review in a future post. The goal of this post is to give you an overview of the types of business risks on the path to success.
- Loss of Key Talent
- Natural Disaster