The Risk of You

Risk Management Survival Kit For Small Businesses

Small businesses are the lifeblood of every economy. Without them, larger corporations would not exist. Why then are small businesses the worst to suffer when national or global crisis such as the pandemic, geo-political and other global crisis happen? Most people will not attribute these critical losses to the economy to absence of conscious risk management.

By Chizubel Egwudo

20 Simple Steps You Can Take To Survive Crisis That Are Outside Your Control And Still Grow

When you think about it, the education, study and practice of risk management largely excludes small business. 95 percent of the risk textbooks written are not designed for small businesses.

At The Risk of You, we are small business friendly. Our services and training have been designed with small businesses in mind so they can build resilience and grow even when crisis happen.

Here are 20 simple steps businesses can take to optimise their business risk management:

  1. Take Risks: small businesses should not be afraid to take risks to grow. During a crisis, opportunities may present themselves that would not have been available otherwise. Be dynamic about risk taking, knowing when to take a risk without thinking twice about and when to take a more a cautious approach before making a decision.
  2. Actively Identify Opportunities: part of taking risks is being able to identify opportunities when they arise. Be proactive about finding opportunities within and outside your company. This means being aware of the market and being able to act quickly.
  3. Be Flexible: another important aspect of risk management is being flexible. This means being able to adapt to changing circumstances and being open to new ideas.
  4. Develop and Maintain Resilience: during a crisis, it is important for businesses to be resilient to bounce back. This means having a good contingency plan in place and being able to execute it quickly.
  5. Develop Contingency Plans: one of the most important things businesses can do is to have a contingency plan in place in case of a crisis. This plan should obviously be developed before crisis and include alternative strategies and solutions. Scenario testing of potential events can help test your contingency plans. More like a fire drill metaphorically speaking.
  6. Review Risk Management Processes: after a crisis, it is important for businesses to review their risk management processes. This includes assessing what worked and what didn’t work and implement lessons learned into your processes regardless of your type of business or size.
  7. Communicate With Stakeholders: during a crisis, it is important for businesses to communicate with all of their stakeholders. This includes employees, customers, suppliers, and investors.
  8. Keep Your Eyes On Your Cash Flow: during a crisis, it is important for businesses to manage their cash flow. This means making sure they have enough cash on hand to meet their obligations.
  9. Review Existing Contracts: during a crisis, it is important for businesses to review all their contracts. This includes looking for clauses that could be used to get out of the contract or renegotiate terms.
  10. Take Advantage of Government Programmes: during a crisis, businesses should take advantage of any government programmes that are available. This could include tax breaks, grants or other forms financial assistance.
  11. Adjust Your Spending: during a crisis, businesses should look for ways to cut costs. This could include renegotiating leases or cancelling contracts nonperforming contracts.
  12. Review Insurance Coverage: during a crisis, businesses should review their insurance coverage. This includes making sure they have the right coverage in place and that it is up to date.
  13. Increase Sales: during a crisis, businesses should look for ways to increase sales. This could include offering discounts or introducing new products that are attractive and solves problems relevant to the impact of the crisis to customers or clients.
  14. Diversify Your Sources of Income: during a crisis, businesses should look for ways to diversify their sources of income. This means having multiple streams of revenue that may be outside the scope of services or products being offered. During the COVID pandemic, the term ‘Pivot’ trended because of many small businesses doing what they had to do to survive.
  15. Focus on Customer Service: during a crisis, businesses should focus on providing excellent customer service. This means going above and beyond to meet customer needs.
  16. Build Relationships: during a crisis, businesses should focus on building strong relationships with their stakeholders. This includes employees, customers, suppliers, and investors.
  17. Revisit Your Purpose: your purpose statement and business roadmap is a reminder of where you want to take your business. Crisis will cause slowdowns so be the driver of your ship and augment your roadmap but keep your eyes on your destination.
  18. Promote Employee Well-being: during a crisis, businesses should focus on promoting employee well-being. This includes providing support and resources to help employees cope with stress.
  19. Stay motivated: if you are the small business owner or director, read a book, listen to podcasts, exercise, take long showers – yes, I mean it, take long showers because water has a way of stimulating ideas and creativity that will keep you motivated.
  20. Planning for the future: after a crisis, businesses should focus on planning for the future. This includes setting goals and putting together a strategy for growth.

You probably never thought the steps above are risk management. Technically speaking, these are referred to as ‘Controls’ in risk assessment. Their effectiveness is essential for getting you through potential problems when they happen.

So ever give up when crisis happen. Every crisis always comes to an end and only those who stayed the course wins. Remember this phrase when crisis happen and share it with you team: ‘THIS TOO WILL PASS’.

We are proud to say that the services we provide are designed for and applicable to small businesses. Please contact me directly or any of my team using the contact options to have set up a meeting to discuss your needs.

Thank you for taking the time to read this article.

Please check out our other articles for vital resources.