Preparing your business for unexpected risks
We learned in 2023 that businesses should prepare for the unexpected and unthinkable. If your business has survived or thrived due to unexpected opportunities, it is now a good time to review potential risks and mitigate them.
The loss of key talent
Losing key talent is one of the greatest risks for new businesses with small teams. What would the replacement be worth in terms of knowledge of organization, expertise and potential clients if each person left?
It is important to consider the possibility of losing workers (at least temporarily) due to accidents in certain sectors. You may be sued by an employee who is unable to work because of an accident at the workplace. You must have enough insurance to cover liability claims. Consult a legal specialist who specializes in workers’ compensation so that you fully understand the financial implications. You will also be able to focus more on safety and training.
Minimize the risks that are foreseeable
Priorities will be difficult to determine in the middle of a crisis. Do your research before you face the worst. Inventory is the most important thing to you. What about your data and customer list? Your talent? Your talent?
Consult with the experts
It can be hard to predict the unexpected when you are a brand new business owner. It’s worth consulting experts to reduce your risk, no matter where you are in the process. An experienced
A broker can examine your cover to determine if it is adequate (or excessive). An expert in finance can review your finances and identify any weak spots (cash flow issues, excessive stock, weaknesses in the supply chain) that you may have overlooked. You can then take immediate and long-term actions to correct them.
Monitor the threat environment
In order to be prepared to respond to sudden events or changes in your threat environment, it is important to be aware of the possible threats which could impact on your people and operations. Weather and the environment, as well as health, safety, transportation and legal issues, are high-risk threat areas. There are also other areas that can be affected.
Understanding the threats is the first step. It is not an easy task and requires both research and imagination to imagine what could be possible.
Examine your insurance coverage
Insurance is the best way to protect your company from unexpected events. Insurance can assist you in recovering financially from a disaster, whether it is property damage, liability claims or lost income. Be sure to have adequate coverage for your company and review it regularly.
Make sure your business is adequately covered against all potential risks. Included in this is property damage, liability and product liability coverage.
Determine the types of insurance required by your business by assessing liability, and legal regulations. Certain insurances such as specialist professional insurance can cover professionals like accountants, lawyers, and doctors from claims made by clients due to negligence or for other reasons.
Worst-case scenarios
Cost each risk once you have identified them. How long would you be able to survive if the business was forced to close? What is your lowest operating margin when you are forced to discount in order to stay competitive?
Organisations must also gather intelligence about the dynamic and intrinsic threats in a particular region, based on past incidents and possible sources of threat, such as militants, terrorists and labor groups.
The location is always a threat, whether it’s crime, kidnapping, or disease. It’s not likely to change in severity. They can be evaluated more easily and incorporated into your risk assessment. Because they will be present for a long time, organizations should invest in mitigation strategies that are permanent, such as fencing, video surveillance, and guards.
Working with stakeholders
You shouldn’t do disaster planning alone. Consult your stakeholders and plan together how you will support one another in the event of an unforeseen interruption to business. Write down your agreement so that all parties are clear on what to do in case of an emergency.
It’s vital to monitor for any new threats even if your plan is perfected and you’re setting up your operations.
Take a pledge
Commit today to reducing the risks that could affect your business. Create a Disaster Recovery Plan and involve key stakeholders. Follow through on the commitments you made so that your business is always in a strong position.
A risk assessment plan, as well as a set of playbooks, can be used to help mitigate risks in global operations. They also allow for a timely and effective response when something goes wrong. It is also important to gather intelligence and monitor the threat environment constantly, since it’s not possible to predict every risk.
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