Sh*t happens. 5 key business risks.

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We live in an unpredictable and volatile world. The only thing you can be certain about, is that life is uncertain.  Be prepared.  “Aon (provider of risk management) says that 80% of companies that fail to recover from a major disaster will go out of business”. Those are high odds which can be easily avoided if you have a plan. And it does not have to be complicated.

Here are my top 5 risks explained.

Business risks. These include increased competition and failure to innovate.  Are you doing more of the same because it works for you right now? Your competitors are currently working on doing what you do, but better and cheaper.  This is why you need to continually improve your product or service, keep up to date with technological advances and know what your competitors are up to. Don’t keep up – get ahead. If you have the luxury of being able to afford a new business development person, great. If not, then you’ve just added something else onto your job spec. Don’t be a Kodak.

Reputation risks.   “It takes 20 years to  build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” -Warren Buffet.

Here is a good article from Forbes on Ways to repair reputation damage. I think the most important thing to take away, is if something happens, a failure in some way, a dent in your rep, act immediately. Do not ignore it; NEVER let it fester.   It will snowball into a mountain of unpleasantness.  Call a board meeting, agree on a PR message which tackles the issue and get the message out ASAP.

Theft. In my experience it is not usually worth insuring company mobile phones against theft, but IT equipment insurance is essential and always outweighs the costs. Risk is easily mitigated. CCTV cameras are extremely useful in revealing the source of any thefts, (as well as  finding out if anyone secretly sleeps in the office!). The very sign on the wall showing there is a camera acts as a great deterrent.   Other forms of theft I have encountered over the years include misuse of company credit cards. Someone should always sign off expenses and check credit card receipts. No matter what level they are. Make it policy and lead by example.

Data Protection. You are legally obliged to protect personal information about your clients, suppliers and employees. Don’t get caught out- know the rules. The Information Commissioner’s Office (ICO)’s website is a wonderful resource. You can find advice and guidelines for direct marketing, holding customer information, a checklist for small businesses and much more. If you fail to keep up with the law you are at risk of being fined up to £500,000. Ouch.

IT risks.  A tornado, an earthquake or a comet pays you a visit. It’s all gone: client list, accounts, creative work, all of it. You’re on the cloud right? If properly set up, you should able to access everything from your safe location.  IT risk management can of course get a lot more complicated than this. But if you are small business starting up, I suggest choosing an accounts system and a server system which are cloud based.  It’s a good start.

It goes without saying, make sure you are properly insured for fire, terrorism, employers’ liability, director and officers insurance, professional indemnity, public liability. You can get a bundle business package which covers it all.

Want to read my blog as soon as it comes out? Please “follow” on bottom of page. I offer Finance Director consultancy services to small and medium businesses in the London and surrounding area. Please contact me if you’d like to discuss how your business might benefit.

website: www.wrightcfo.co.uk

email: sophie@wrightcfo.co.uk

Tel: +44(0)7817 784 603

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