Is your business playing roulette?
Regardless of the shape or size of your business, or the sector you’re in, there will always be a measure of risk. The extent to which risk affects you may vary, but the threat is very much there.
Businesses within regulated sectors have generally had defined risk management programs and governance embedded for years. However, the same can’t be said for unregulated businesses, many of whom see risk management as unnecessary, and a strain on resources. The main argument is the cost of implementation and the ongoing governance involved.
There’s another issue - in many cases there’s a notable lack of knowledge and expertise within businesses around the subject of risk, often it’s the leaders and executives of a business who don’t realize the importance and value of an effective risk management strategy.
What is Risk Management?
Businesses are under a great deal of stress and pressure - financially and otherwise. The current economic situation has exacerbated this greatly. But, risk management involves the identification and measurement of factors that could potentially affect a business.
Having a risk management strategy in place not only helps business owners understand the most significant risks affecting them, it also helps to develop a risk appetite – which is the risk a business is willing to accept and expose itself to in order to fulfill its objectives and goals.
The Value of Risk Management
The chief value of risk management is that identifying risk enables better business decisions to be made, as these decisions are made on an informed basis. Additionally, it can help ensure that any operational decisions being made are in alignment with larger corporate objectives.
Other benefits of effective risk management are:
It creates an ‘early warning system’, helping businesses preempt likely risks before they occur, and take the necessary steps to mitigate them.
A comprehensive risk management strategy increases awareness of risk across the business, starting with the c-suite and then throughout.
A business can avoid unnecessary and avoidable financial loss, as well as the types of non-financial loss that can be just as devastating, like reputational damage.
Like any initiative, implementing a risk management strategy involves time and resources. But the benefits far outweigh the costs.
Cyber Risk
Cyber risk remains within the top 5 risks faced by almost every business on a global scale. Again, this is something that many businesses, especially SMEs, often think is irrelevant - after all, why should a threat actor (individual or group of people who perform malicious acts to exploit open vulnerabilities and disrupt business operations) be interested in a small business with limited resources? The opposite is true, however - SMEs are a prime target for cyber attackers.
The value of risk management will become immediately clear if a business is affected by a cyber incident - painfully so if the business is unprepared, with no or insufficient cyber insurance, incident or disaster recovery plan, and with employees unskilled in cybersecurity best practice.
The danger is that a business is playing a dangerous game of roulette.
Consider the following questions:
● What are the key risks affecting your business today, or that could affect your business within a very short period of time?
● What is your business doing about each of those risks?
If you’re unsure about the threats currently posed to your business, or the action you should be taking, KV impact are here to help you. Our team of specialists would love to chat about your needs, and explore how we can help you grow a stronger business.
