Risk management

Risks to your business can exist anywhere and it can be hard to predict when they will occur. Managing risk is an important part of business, and planning for risks before they occur is often the easiest way to do this. For example, as a business owner you may want to plan for when:

• interest rates or prices increase
• your competitor introduces a new product
• an injury occurs in the workplace
• skilled staff leave
• a natural disaster or terrorist activity affects your business.

Risk management is a systematic process of making a realistic evaluation of the true level of risks to your business. Before risks can be properly managed they need to be identified - you can begin with these questions:

• What can go wrong?
• What can I do to prevent it?
• What do I do if it happens?

There are standard procedures and processes to handle risk management in business. Standards Australia has developed a Standard, AS/NZS ISO 31000:2009, Risk management - Principles and guidelines that outlines procedures and processes to implement.

A good plan is to develop a risk register to document each potential problem, its level of seriousness, what is required to fix it and who will fix the problem.