Part of every business plan is creating a risk management plan. You probably took this step in the forming of your own company and developed a response for each risk. While that is adequate in the beginning, and often the only avenue many small business owners have, consider bringing other people onto your assessment team when it is time to update the plan.
Risk Management Benefits From Multiple Inputs
Risk managers divide risk into two categories, external and internal. External risks are categorized as forces you have no control over, and it's difficult to develop a thorough response. These are often the hardest to deal with because you are reacting to an unforeseen situation.
Internal threats are the weaknesses that exist in your business. An example would be an ineffective and costly marketing campaign or having to replace or repair manufacturing equipment.
You can develop plans and procedures to deal with these problems. As an expert in your profession, you're probably already aware of these situations and understand why they occur in your industry.
You have no control over external threats, and often you don't foresee their occurrence. These can range from incidents like fire, flood, and unexpectedly losing a member of your management team to increases in your taxes and changes to government codes.
External risks are the areas where you could use some experts on your risk management team.
Here's How To Build Your Risk Team
By making your team, you don't need to put more people on the payroll. There are other cost-effective ways to get solid advice from experts. For instance, you can consult with professional organizations related to your business to learn about shifting influences in your industry.
If you are anticipating expanding your facility or moving to another part of town, consult with a local commercial real estate agent and learn how it would affect your company's performance. The agent will probably also know about the current zoning laws.
One person you will want on your team is a reliable insurance agent. Insurance is an invaluable layer of protection and a crucial part of any risk plan.
If you are the victim of a natural disaster, lawsuit, or some other external risk, insurance is your immediate source of protection and safety net. However, different industries require different policies. By making an insurance professional part of your team, you'll get expert advice on the right types of plans to buy and how much coverage you should purchase.
Culture Insurance is a premier business insurance broker in the San Diego area. We work with many businesses in developing thorough risk management plans. If you are considering a change to your risk management plan, or are in the process of creating one, we invite you to contact us for a consultation.