Risk, defined as the probability of an event occurring and its consequences, is faced by businesses of any size. Whether you’re a global company of a small start-up, risk management (evaluating processes, methods, and tools) should be at the top of the priority list.
Risk management aims to assess the state of any given business, looking for weaknesses and vulnerabilities that could cause potential disruption, and create a strategy that minimises and prevents this. By identifying risks before they can occur, businesses can take a proactive approach to security and smooth operations. Small businesses need to be especially wary of operating without a risk management or recovery plan in place as they are more likely to experience disruption that is near impossible to recover from.
It is only by approaching risk management consciously and strategically that business can best protect their income and reputation. To begin engaging in strategic planning, all businesses must first methodically identify risks surrounding any short and long-term business activity whilst assessing the likelihood of disruptive events occurring. The next stage is deepening the understanding of best responses to these events and creating (or updating) a system that will help to deal with consequences. Once in place, risk management plans need to be tested and periodically updated to ensure they stay relevant to evolving risks.
By engaging in this kind of strategic planning, businesses improve prioritisation of capital and resources together with decision-making, since disruption needs a strong and quick response to minimise its negative effects. One of the biggest risks facing businesses of all sizes is the threat of cyberattacks. 2018 saw businesses and governments experience a number of high-profile attacks that led to exposure of personal customer data alongside intellectual property, and more. Interestingly, phishing remains an effective and frequent method of separating individuals and businesses from their data as the scams become more specific and personalised. This is just one example of why businesses must plan for and invest in preventing disruption; frequent training is required to ensure that all employees are up to date with best security practices, even if it’s just a reminder to double-check the email’s sender.
Sometimes it’s best to leave all the aforementioned tasks to experts if you feel that you cannot successfully complete them alone or have the resources available to outsource this to experienced professionals. Many companies make risk management their daily jobs and you can choose from a holistic or a more targeted approach. For example, you may be managing most of your risks perfectly well but struggle with cyber-security. In this instance it may be best to let experts intervene; services like penetration testing, whereby your company’s cyber-security is exploited for weaknesses, can help to prevent hackings and data breeches – making it a great investment in the long term.
Remember, strategic planning and risk management should be viewed as continuous tasks that are reviewed and adjusted often. Such close monitoring guarantees that all risks are appropriately identified and assessed before they can cause real disruption, and that staff are aware of best security and recovery practices.