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SMART Ways to Manage Business Risk

By David S. Chang

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As a business owner, you need to have a risk-management plan in place. It isn’t a matter of if an accident or problem will take place, but when. It is important to do what you can to avoid them, and for those you can’t, minimize its impact. Here are SMART Ways to manage your business risk.


Identify the risks

The first step is to think and list the risks your business might face. Your business may face physical risks. Depending on the industry and locale of your premises, your business might be at risk of fire, flooding, and natural weather conditions. There might also be specific health and safety issues within your business.

In some businesses, a more intimate connection with the client is an essential part of its daily operation. This may include handling possession belonging to the client when repairing, maintaining or upgrading it. When you are liable for the damages, it’s essential to be as careful as you can to not only respect the property of the client but to work on it in a safe environment.

You should think about financial risks too, and the factors that could cause your business to suffer financially. So, you might list your competitors as a risk, as well as other risk factors, such as market changes and non-paying clients.

Insure Yourself

Liabilities or content insurance can be a great method of ensuring that the value of whatever you held will be protected despite certain issues that might occur, such as a fire. If something terrible should happen like a natural disaster or theft, you’ll want to be covered financially. You’ll need to have the money injected back into your business so that you can continue.

Business insurance isn’t mandatory, but it’ll save you a lot of trouble and strife. There are lots of different kinds of insurance in business: there’s insurance for tradesmen, medical insurance, product liability, and many more.

Find the Right Advisor

It’s understandable that you might not know exactly what you’re doing in terms of your finances – that’s where an advisor would come in handy. They’ll be able to guide you through everything money-related and how to maximize every dollar you earn. They can also help you spot opportunities and strategies that you did not know of.


Analyze the Risks

Once you determine the risks relating to your business, next you need to consider the likelihood and potential consequences of each. When thinking about any physical risks, you might consider the likelihood and consequences of a natural disaster. If your premises are located in a high-flood area, for example, then the chances of your business being affected would be high.

When thinking about health and safety, you should consider the consequences of not following proper guidelines. An industry-specific such as a construction or a maritime accident attorney can help you understand the different risks and their impact.


Minimize the Risks

After analyzing the identified risk factors, you then need to take action by minimizing the risks that could affect your business. Sometimes you may need to make repairs to your premises, equip your employees with the relevant safety gear, and give your staff health and safety training.

When looking at the risks posed by your competitors, you should take steps to beat them. For starters, you should improve your marketing, as this will you greater inroads into the consumer marketplace. You should also look at what your competitors are doing better than you, and then do whatever is needed to better them.

Here are some other examples of ways you can minimize potential risks:

Have The Client Sign A Waiver

Of course, there are certain things that you cannot predict or prevent. Natural disasters and accidents that are unavoidable could put your client’s possession at risk. This is where having the client sign a waiver, that despite your best intentions and your willingness to provide the best care you can, there is a small chance that you cannot guarantee the protection of their property. Ensure this is not in the small print, but a clear part of the contract they are signing.

Store The Items Correctly

It’s important to store the items correctly if you hope to keep them cared for. This is where prefab steel buildings can be constructed to ensure a totally isolated and secure environment, as well as the ability to categorize your held items with some of the best and most reliable shelving units or integral tagging systems. Despite the liabilities insurance or protection you have, you must take every worthwhile step to ensure the item is spotless when being returned. This means that storage is one of the most important steps here, and so you should invest in this wisely.

David S. Chang

Award-Winning Entrepreneur, Wealth Manager and CEO | Chief Editor, Author, Keynote Speaker, Consultant ArtofThinkingSmart.com | Political Consultant | Army Officer National Guard | Living To Fulfill Needs, Solve Problems, and Live Passionately!

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