7.2.6 Risk Management

Every small business needs to identify and mitigate risk, but it frequently gets pushed to the bottom of the list simply because establishing a plan that covers all potential risks sounds like an overwhelming effort. And certainly, it is almost impossible to account for every risk that can have an impact on your company. However, you can absolutely cut the list down and implement security measures like cybersecurity insurance and a crisis communications strategy.

The following points should be taken into account while creating a risk management plan:

Provide the right amount of coverage for yourself and your employees while avoiding overpaying for healthcare and worker’s compensation coverage

Include cash flow contingencies in case of a business interruption due to a disaster or death of a key person.

How will you respond if an employee, supplier, business partner, or other third party commits fraud or loses or steals company property?

Speak with a lawyer about defending your company in court.

You don’t have to start from scratch, so keep that in mind. A free training manual titled “Risk Management for a Small Business” is offered by the Small Business Administration.

Losing the founder or another key leader is one existential risk for any organization; do you have a strategy in place for what will happen if you are forced to leave?

That brings us to the next three matters, each of which merits its own strategy and focus despite being connected.

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