Business is risky, there's no denying it. But you know the old adage: 'No risk, no reward'. And the good news is that while it is impossible to escape from risks, it is at least possible to manage them.
The risks that a business faces will vary depending on its sector, but there are some common risks that they all - or nearly all - face. These include:
- Recession
- Financial difficulties
- Growing too fast
- Litigation
- Natural disaster
- Accidental damage, for example, fire, flood etc
- IT system outage
- Fraud
- Regulation
- Reputation
- Failure to adequately protect data
- Criminal damage
- Departure or deaths of key personnel
- Losing customers
- Insolvency of a key supplier.
You should carry out regular assessments of the risks that face your business and put in place plans to monitor them and deal with them in the event that any actually occur. This is known as contingency planning. You should also think about business continuity - for example, if you had an accident, is there someone who could cover for you? If your main supplier's warehouse burned down, do you know of an alternative supplier who could supply your business so that there is no interruption to production?
Finally, don't forget to put appropriate insurance policies in place with reputable providers. You never know when you might need them.