5 Areas Of Risk Management That Are Easy For Businesses To Overlook.

New businesses usually address operational or hazardous risk but the biggest risks facing small and medium businesses today are financial risks.  In Financial risk cash-flow is your primary are of concern as businesses must plan for their revenue stream to keep the business operational, to pay employees, invest in market growth.

Some other important risks are risks that involve employees.  It is vital for businesses to cover employee-related risks such as worker’s compensation insurance and healthcare costs.

By far the most commonly overlooked risk is a company’s reputation! The explosion of social media has exposed companies to public opinion never before experienced.  Every customer now has an audience that they can go to if they are not happy with your company. Additionally, every company should have a policy regarding employee use of on line conversations. This should guard against any employees using social media that can have both positive and negative impact on the company.

Some companies have potential risk in their supply chain.  Is your business relying too heavily on subcontractors to produce their parts or deliver critical aspects of the project needed to sell its products?  Just-in-time ordering and an economy that dictates operating very conservatively, your company may need to be concerned about what their contingency plans are for backup supplies.

Obviously you need your business to have appropriate insurance coverage as well.  It is one of the most important things a business owner can do to protect their company.  Find an insurance agent or broker that has experience and a good reputation in representing your industry and work with them to determine the right coverage and terms for your risk.

The first advice I can give to a new business owner is to analyze and categorize your risk management right as soon as possible. Determine all risks and planning for how they will be mitigated will help reduce risk-related costs such as insurance premiums, claims deductibles, and downtime.

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