Understanding the qualitative distinctions between the types of risks that businesses encounter is the first step in developing an effective risk-management strategy. Studies show that risks fall into one of three groups. Risk occurrences of any type can be damaging to a company’s strategy and even its longevity.
The three categories are preventable risks, strategy risks and external risks.
Preventable
These are internal hazards that originate within the organisation and should be removed or avoided.
Examples include the risks posed by unauthorised, illegal, unethical, inappropriate, or improper activities by all workers including supervisors. This also includes the risks posed by disruptions in ordinary operating routines.
Strategy
A corporation willingly accepts some risk in order to achieve higher returns from its strategy, and many companies incur risks through their R&D efforts.
A plan with high predicted returns typically necessitates the corporation to take large risks, and controlling such risks is a crucial driver in achieving the potential benefits.
External
Some threats are a result of circumstances outside the organisation and are beyond the company’s influence or control. For example, natural and political calamities, as well as large economic developments, are contributors to external risks.
As these incidents can’t be avoided, management must work on identifying (which is usually clear in retrospect) and mitigating their impact.
As a business owner, there are things that you can do to reduce business risks.
Here are our 3 top ways to reduce risk.
Get insurance
Obtaining insurance is one of the most effective ways to decrease company risk. Make sure you do your homework to get the best value, as some may overstate their claims to catch your attention.
Having insurance helps you to safeguard your company in the event of an accident or natural disaster. It provides you with complete peace of mind knowing you have something to fall back on if your business is hanging by a thread.
A solid insurance plan protects both your property and your staff.
Build your reputation
While short-term success is important for your business, it is far more essential to maintain it operating for a long period. In other words, having a good reputation allows customers to trust your organisation. As a result, running your business gets easier.
According to the Harvard Business Review, reputation is a matter of perception that leads to good outcomes. Businesses with a strong reputation are seen to be more valuable. Customers remain loyal and industries believe they can provide consistent profitability.
Have a great team at the core of your business
Employees are the backbone of a business. Without them, your business is going nowhere.
Therefore you should hire employees who have a real passion for the work they do, those who don’t, tend to dislike their job which consequently affects their job performance. Ensure that the employees you hire have skills that are a perfect fit for the position they will be assigned to.
At Reef Professional Services, we will only ever propose candidates that have been thoroughly vetted and checked through our sister company Reed Screening, the UK’s fastest growing pre-employment screening service.
Reduce hiring risk safe in the knowledge that any resource proposed by RPS has been proactively sourced for your unique requirements and will deliver what you need them to.
If you require further assistance with this critical part of your business, please contact our team of experts here. We are here to deliver risk-free project management solutions to ensure your project doesn’t encounter any bumps in the road. Kindly inform us of your requirements so that we can provide the best solution for you.
