How to Successfully Reduce Business Risks

How to Successfully Reduce Business Risks
04 May 2017

Taking risk is the heart of any business venture. Setting up shop or otherwise building an enterprise takes time and usually lots of capital. As the saying goes, “Nothing ventured, nothing gained.”

However, there is a big difference between calculated risk and doing things unnecessarily risky. Simply put, if the risk isn’t acknowledged and factored into the decision-making process, it signals doom for a company. Sure, an unintentional gamble may pay off once, twice, or even several times. But eventually uncalculated risk comes back to bite the business owner.

The flip side to this coin is an overabundance of caution. Baby steps in every direction, at every stage, will not bode well for businesses of the 21st century. The world is moving too fast. Not to mention, caution usually equals cost. Startups can’t afford to insure against everything.

Business Risk Management

So, with this in mind, the recipe for successfully reducing business risk is to determine which risks are actually worth worrying about. It’s not unusual for threats to be blown out of proportion or otherwise misunderstood, and consequently the focus of business security is misaligned.

Here is a basic guide for determining what risks businesses ought to guard against when funds and time are limited (when aren’t they) and what can be done to properly protect the venture from harm:

Theft and Other Malfeasance

Deep background checks and multi-tiered security clearances are the stuff of major firms and government agencies due to so much being on the line. Most companies, while certainly taking steps to vet staff, aren’t investing this much into the process.

Yet for a business, the concept of “so much being on the line” is relative; if an employee wants to steal or act a fool on company time to the point it risks the enterprise itself, isn’t this enough of a risk to warrant deep investment in security? Yes and no.

Assuming resources are limited, the investments in security ought to be effective. With this in mind, focus less on premises protection like alarms and cameras and more on network security and digital forensics. Services such as Califorensics ought to be consulted for solutions to preventing and detecting the types of workplace theft and malfeasance most likely to occur these days. Rather than visually monitoring staff to cut down on slacking off, explore their data trail to determine their activity and behavior while at work.

Illness and Injury

At risk of sounding crass and overly shrewd, employers have to think of employees kind of like machines. So long as a company depends on manpower, it’s essentially running on the hardware of the human body and/or software of the human mind.

It would be ridiculously risky for a company to depend on machinery and simultaneously refuse to care about its wellbeing. That is, if it were costly to replace. For companies with highly specialized staff, ignoring health and safety in the workplace is essentially risking the loss of a central component of the business machine. The whole thing grinds to halt if a person is knocked out by illness or injury.

Apart from healthcare, companies might believe themselves relatively free from worrying about employee wellbeing, especially in seemingly low-risk office settings. However, the office is almost as dangerous to health as any factory or other industrial setting. Sitting all day, breathing in stale air, staring at computer screens under bad lighting leads to a host of health issues. To reduce the risk of downed staff, ensure the workspace is not detrimental to carbon-based lifeforms.

Natural Disaster

If insured to the hilt, companies feel secure in the face of whatever natural disasters are known to plague their part of the world. However, most assets these days exist in a virtual space, often putting concerns for material capital on the back burner.

The solution here is simple: opt for cloud services whenever possible and get in touch with a disaster recovery as a service provider for solutions to potential destruction of on-site servers. Coupled with the aforementioned network security measures, this can keep data immune from any threats to a local system.

Risk is a part of business, yet no business will succeed for long when taking unnecessary risks. At the same time few startups have the resources to plug every potential hole. Added up, this equals a need for companies to know which risks are worth worrying about, and how to guard against them as best as possible.

Featured Image via Pixabay

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Waqar Tariq

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