Risk Management - How To Mitigate The Biggest Risk In Your Business

Many risks affect your business. Every business owner appreciates there is risks just like single source suppliers, key customers, even Nature Herself that would at any moment bring your business to its knees. However there is one risk that's so critical, so important to understand that it often goes undocumented and untreated. Should this particular risk ever come to fruition it could bring your entire business down in a single day. This risk often hides in plain sight, some business even have this risk in their name. You might have guessed it, but one of the biggest risks to your business is YOU!

Mitigating your biggest Risk.

You might believe you're a fit and healthy person, you might also have plans of working in your business for years to come, however as you're aware there are no "certainties" in life. The very substance of risk management is identification, documentation and treatment for every known business risk, but exactly how can you create a treatment plan for something as critical and as important as "you"?

What would happen if?

What would happen to your business if a key employee left? Simple there'd be a period of pain and you would rehire. What would happen if your sole supplier suddenly went out of business? You would refer to your risk plan and seek another supplier. What would happen if a flood took out your data server? Easy you can revert to a back up, purchase new kit and move on.

However, could you take a holiday from your business? what would happen if you suddenly got sick? Who will replace you? Who would know where to start? Would your business continue?

Identifying what you do.

Make no mistake, understanding what you "do" in your business is not an easy task. First, there is the argument that only you can do what you do. Second, there is the time it takes to understand and capture your tasks. Third, there is a mystic that some people simply don't want others to know what goes on in the inner core of their business. There is however, a great reward for going through this exercise.

Worth the effort.

While some competitive intellectual property should remain secret, the tasks you perform daily to keep the business running must be identified if you wish to mitigate your biggest risk. It takes time and effort to look at what you do in detail and document it. This exercise, this discovery and identification process could be the most important thing you ever do, it could in fact save your business. How?

Process can set you free.

By discovering and documenting what you do, you will be developing a process. The power of this process is that a process is repeatable and with some effort process can be refined and improved. But that's not the best bit! An incredible new option is opened up to you in this new process driven world. Someone other than you can learn, and eventually do what you do. This means you don't have to.

Why repeatable process is key.

There are two essential things about business process freedom and control.

Freedom.

Business processes give you the personal freedom to consider holidays without anxiety, develop other projects, and perhaps start other business. Those who understand this even work out methods to franchise their business, why have one business earning cash when you might have 2, or 3.

Control.

Process offers a business something incredibly powerful, control. A set of activities when organised into a process can be measured and improved. The discipline of "process improvement" is the reason big companies got that way.

Process creates a strategy to scale, a way to improve and a way to optimise. I do think every business needs robust processes, or it's at significant and serious risk.