Avoid risk by not carrying out activities Business Plan Risks How to I would like to include a risk analysis in my business plan.
Toxic dust or filings Poisonous liquids or waste Fire department hazardous material units are prepared to handle these types of disaster. People who work with these materials, however, should be properly equipped and trained to handle them safely.
A plan should be created and implemented to handle the immediate effects of these risks. Government agencies and local fire departments may help in acquiring information to prevent these accidents, as well as provide advice on how to control them and minimize their damage if they occur.
Location Risks Among the location hazards facing a business are nearby fires, storm damage, floods, hurricane or tornado, earthquake and other natural disasters.
Employees should be familiar with streets leading in and out of the neighborhood on all sides of the place of business.
Keep sufficient fuel in your vehicles to drive out of and away from the neighborhood. Human Risks Alcoholism and drug abuse are major risks to personnel in the work force. Employees suffering from these conditions should be urged to seek treatment, counseling and rehabilitation, if necessary.
Some insurance policies may provide partial coverage for the cost of treatment. Protecting against embezzlementtheft and fraud may be difficult, but these are crimes which occur frequently in the workplace.
A system of double-signature requirements for checks, invoice and payables verification can help prevent embezzlement and fraud.
Stringent accounting procedures may discover embezzlement or fraud. A thorough background check before hiring personnel can uncover previous offenses in the applicant's past. While this may not necessarily be grounds for declining to hire an applicant, placement for the new hire in a critical position in which money and cash equivalents are used may not be judicious.
To prevent loss of productivity, assign and train backup personnel to handle the work of critical employees when they are absent due to a health-related concern.
Technology Risks Power outage is perhaps the most common of the technology risks. Auxiliary gas-driven power generators are a good back-up system to provide electrical energy for lighting and other functions until utility power is restored. In manufacturing plants, several large auxiliary generators can keep a factory operational until utility power is restored.
Computers may be kept up and running with high-performance back-up batteries. Offline and online data back-up systems should be used to protect critical documents.
Although telephone and communications failure is relatively uncommon, risk managers may consider providing emergency-use-only company cell phones to personnel whose use of the phone or internet is critical to their business.
Each of these strategy-related risks are inherent to an organization's business objectives. When structured efficiently, acceptance of strategy risks can create highly profitable operations. Companies exposed to a great deal of strategy risk can mitigate the potential for negative consequences by creating and maintaining infrastructures that support high-risk projects.
A system established to control the financial hardship that occurs when a risky venture fails often includes diversification of current projects, strong cash flow or the ability to finance new projects in an affordable way, and a comprehensive process to review and analyze potential ventures based on future return on investment.
Making a Risk Assessment After the risks have been identified, they must be prioritized in accordance with your assessment of their probability. Establish a probability scale for purposes of risk assessment. For example, risks may be: Very likely to occur Small chance of occurrence Very little chance of occurrence Other risks must be prioritized and managed in accordance to their probability of occurring.
Actuarial tables — statistical analysis of the probability of any risk occurring, and the potential financial damage ensuing from the occurrence of those risks — may be accessed online and can provide guidance in prioritizing risk.
Insuring Against Potential Risks Insurance is a principle safeguard in managing risk, and many risks are insurable. Fire insurance is a necessity for any business that occupies a physical space, whether owned outright or rented, and should be a top priority.
Product liability insuranceas an obvious example, is not necessary in a service business. Some risks are inarguably high priority, such as the risk of fraud or embezzlement, if employees handle money or perform accounting duties in accounts payable and receivable.
Specialized insurance companies will underwrite a cash bond to provide financial coverage in the event of embezzlement, theft or fraud.Risk Analysis. Risk analysis involves examining how project outcomes and objectives might change due to the impact of the risk event.
Once the risks are identified, they are analysed to identify the qualitative and quantitative impact of the risk on the project so that appropriate steps can be taken to mitigate them.
Game Plan. If you and your business partners are having difficulties coming to an agreement in creating a business continuity plan, you may want to consider hiring a . Business risk is a growing concern, especially in today’s economy. Business owners need to take control of their companies, assess the risks inherent in both their firms and industries and.
Develop a Strong Business Plan. A famous quote goes, "If you fail to plan, you plan to fail." While no entrepreneur goes into business planning to fail, many of them start off failing to plan.
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