Managing a business means you will be faced with some risks, some too overwhelming that it might lead to the eventual folding of the business and others quite challenging but surmountable. Since facing risk is part of the process of running a business, how do you identify one? This article answers this question by examining 5 ways to identify risk in business.
Building risks
One of the most challenging risks to handle is building risk. Imagine something trigger an explosion in your workplace, are your workers well-informed on the right measure to take? Do they know the exact number of the building and can give a detailed direction to 911? Do you have smoke detectors and fire alarms? Do your employees know all the exits in the building? Ensuring your employees are well equipped so that they know the right move to take should something like this occur is important.
Location risk
Another situation that poses risk to your business and employee is location risk. If your company is prone to fire, tornadoes, or hurricanes, you should ensure all your employees are aware of the condition of such a place and are equipped with the right amount of knowledge needed to scale through.
Human risk
This is another risk that can pose a threat to the growth of a business. If there are smokers among your employees, advise them to seek help or rehabilitation. In the same vein, ensure your company is well protected against fraud and embezzlement. This might be difficult but with stringent accounting procedures, you can uncover hideous embezzlement and fraud.
Strategic risk
Companies such as financial institutions and pharmaceutical companies are exposed to strategy risk. Financial institutions are exposed to strategic risk when lending money to their customers. In the same vein, pharmaceutical companies are faced with the risk of ensuring that every new drug is thoroughly researched and well-developed.
Having identified the aspect of the business that might pose a risk to the company’s growth, it is essential to create a risk management team to handle the process of developing strategies to handle and control the risk. The department would educate the company’s employees on the right measures to take when faced with any life-threatening risk.
Taking note of situations that could pose a threat to the company’s and employee’s progress and existence is an important aspect of business management. As a business owner, risk management should be entrenched in your business plan.
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