better business blog

Tips and stories to add value to you and your organisation

Risky Business!

12 May 2019

Do you like to take risks? Perhaps buy a new flavour of crisps and see if you like them? Or visit somewhere new on holiday for the fun of the adventure?

Driving to work involves risk. As does the school run, when we have to juggle busy roads with grumbling children!

We manage all sorts of risk on a daily basis and think nothing of it.

Sometimes life forces us to make a change and we have to adapt. In my younger days my role was made redundant more than once and in the end I decided to work for myself.

The risk of having one big paid job seemed greater to me than having lots of smaller clients. The risk is more evenly spread and after 15 years I’m still loving my work, and have never been tempted to make myself redundant. (One benefit of being your own boss is that you’re in charge of everything and I like that).

However, there is risk in business and it pays to carry out a risk audit at least once a year, to find out if there are any weaknesses, or blind spots.

We can review our strength in the following areas…

1. Cash. How much are we generating?

2. Sales pipeline. What is the trend here?

3. Customers. Do we know enough about them and their business?

4. Suppliers. Where are we over reliant and therefore vulnerable to disruption?

5. Competition. What trends are there for our products or services and are we ahead or behind the curve?

6. Key staff. How can we guard against the impact of two key people leaving us?

7. Process. Is our quality and on-time delivery performance within customer expectations, or have we become complacent?

8. Information. What is happening in the market place that could affect us?

9. Legislation. Are there governmental changes that could impact our business? (Think about the Making Tax Digital changes and how some small businesses are being affected).

10. Donald Rumsfeld. He said “…we also know there are known unknowns: That is to say we know there are somethings we do not know.”

I particularly like this quote. It invites us to check out our assumptions and arrogance. We can put our ego to one side for a moment and be humble. We can ask oddball questions and be creative with our thinking. If we do, then it’s likely that we will find out a fact that could reduce the risk of our business being hit.

Business is risky and we can be proactive to reduce the risks, or we can sail on oblivious and ignorant. It’s always our choice. What choice would you like your senior managers to make?

So, this week take time to do a risk audit. It may prove your business is sound and well managed and that’s always good to know!

Next week: Do You Have This Email Habit?