As a business owner, it is important to understand the risks that your business faces every day, so that you are then better prepared to manage them. The first step in implementing a risk management plan for your business is in identifying all potential risks your small business faces. Successful risk management is not just about the prevention or avoidance of losses, but includes the proper assessment of risks, measurement, thereof, mitigation and transfer of risk through tools such, as insurance for example, training and contingency planning for loss situations.
What are some of the business risks faced by SMEs and what can one do to mitigate against them?
Failure to manage cashflow is one of the biggest risks facing small and medium scale businesses. This risk usually leads to business failure. Every business must carefully understand where the money to sustain the core operations of the business is coming from every day. Critical issues such as rentals, bills, wages and payments for supplies are the lifeblood of a business enterprise and these commitments must be met timely for a business to be sustainable.