Proactive Measures to Manage Business Risks

1. Managing Risk • Minimising Insurance Risks • Legal requirements • Premises • Equipment • Employees • Theft and fraud • Transport • Insuring the risks • Risk Management • Risk Management Matrix • Two Most likely Causes of Failure

2. Legal Requirements • Risk Assessment (Health & Safety legislation) • Precautions to prevent injury (employers’ liability) • Fire regulations • Employment law • The Companies Act

3. Premises • Main risks: fire, water damage, malicious damage, weather damage • Improve security systems and procedures • A pro-active approach to managing your premises • Improve safety practices

4. Equipment • Identify risk areas e.g. computers • Regular checks of equipment you use to create and distribute your products

5. Employees • If a key employee: • Has an accident • becomes ill • Dies • (also non-insurable risks such as if he/she decides to leave or is poached by a competitor)

6. Theft and Fraud • Identify the likely favourite targets in your business • Theft by employees • Collaboration with other organisations can help prevent theft • Systems to look for symptoms of fraud • Theft of intellectual property

7. Transport • Ensure vehicles are properly maintained • Ensure drivers know about legal driving time limits • An accident could mean legal action against you • Use secure methods to transport valuables

8. Insuring the Risks • Comply with insurance policy conditions or lose protection • Increasing safety measures may reduce insurance premiums • Some risks are uninsurable • Think about risk management • Think about contingency plans

9. Risk Management • Identify your business processes • Identify key elements in these processes • Identify most worrying risks • Assess likelihood AND severity • Run through common causes • Work up actions to minimise likelihood • Prepare contingency plans for when the worst happens (including insurance)

10. Risk Management Matrix

11. Most Likely – Poor Cash Flow • This is when money is taking too long to flow into your business • Your sales may be fine, but you are not getting paid quickly enough • This means you will need more ‘working capital’ (more cash to use in the business) • There are many techniques you can use to manage your cash flow …

12. Most Likely – Rising Costs • Compare actual figures with forecasts • Watch your variable costs • Beware of rising overheads • Don’t hide from hard decisions: • Cut out luxuries? • Switch suppliers? • Sell more products? • Re-cost (and re-price) your products regularly