By developing a Risk Management Plan you can assess and identify which risks your business is currently exposed to. By addressing these risk factors you are able to work towards reducing the risk in your business.
For example:
- if a product is too high risk (eg prone to breakage) you may decide not to stock it.
- The profit margin on the stock items from a key supplier has reduced. You need to increase prices or change suppliers.
- If you start selling your products/services into a new market. Does extra care need to be taken to be aware of all the nuances to that marketplace?
Tip: Talk to our team at Blackburn Accounting to help you with your Risk Management Plan.
An effective Risk Management framework is designed to assist a Business in meeting its overarching public interest obligations along with its Business aims.
The objectives are to facilitate Business continuity, protect the reputation and credibility of the business and enable quality services to be provided to your customers.
Risk management is about analysing and evaluating potential and real threats, then recording the findings e.g. in a Likelihood/Consequence matrix.
Simply, this exercise supports risk reduction, minimisation and the ability for effective responses.
The aim of a Risk Management program is to:
- protect finances, assets and Business operations
- contribute to satisfactory legal compliance, due diligence and corporate governance
- enhance confidence in the practice/ Business
- improves services provided by the Business
7 Essential steps to the Risk Management process:
- establishing the context
- identifying the risks
- analyse and evaluate the risks
- treat or manage the risks
- monitor and review
- communication and consultation
- record outcomes
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