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IT Voice June 2016 Edition

Risks management plan for your business

The process of identifying risks, assessing risks and developing strategies to manage risks is known as risk management. A risk management plan and a business impact analysis are important parts of your business continuity plan. By understanding potential risks to your business and finding ways to minimise their impacts, you will help your business recover quickly if an incident occurs.

Types of risk vary from business to business, but preparing a risk management plan involves a common process. Your risk management plan should detail your strategy for dealing with risks specific to your business.

Some Bullet Points are
· Preparing a risk management plan and business impact analysis

· Identify risks to your business

· Analyse and evaluate the impact of risks

· Treat risks to your business

· Review and update your risk management plan

· Conduct a business impact analysis

Let’s face it, however confident you are that your project will be a success, there is always a chance that something might go wrong. The things that might go wrong are called project risks, and a wise project manager identifies them early at the beginning of the project so that he or she can do something about them. Of course, risk management is an ongoing activity, so you should carry on identifying and recording new risks as they come up. Creating a list of risks is a good starting point, but it isn’t enough in itself. You also need an action plan per risk in order to be able to manage them effectively.
There are 5 main ways to manage risk: acceptance, avoidance, transference, mitigation or exploitation. Here’s a detailed look at each of them.

1. Write a business plan. The process of writing and putting together a business plan is a vital step to assessing, evaluating and planning for the risks of running a business from the various standpoints of the business. This includes operations, finance and marketing.

2. Determine insurance needs and obtain coverage. Most businesses carry liability insurance or insure the building and contents where the business operates. Depending on the business activities, you need to determine the other types of insurance and obtain the correct coverage for your business. For example, a tile installation business should carry liability insurance in case a worker is injured while installing tile. A real estate business or legal business may obtain an errors and omissions insurance policy in case a client sues for a professional wrongdoing.

3. Write a risk management plan. Separate from your business plan, write a risk management plan, which lists all of the possible risks that can affect the business. The plan also lists the steps, procedures and ways in which the business intends on dealing with the risk as it arises. For example, if your business is located in an area of the country prone to hurricanes, then you may have a hurricane preparation plan on how you can minimize the risks associated with this type of weather to your business.

4. Train employees. Avoiding risks and how to deal with the risk if it occurs can help the business avoid further damage or exposing itself to risk in the first place. For example, if your business deals with a heavy machine, such as forklifts, you may want to have each employee earn an OSHA certification for operating the machinery as proper operation of the forklifts can avoid injury and damage risks.

5. Update plans. Even the best of planning efforts may fall short, so when the business is exposed to a risk, react accordingly and then put a formal plan and procedure in place in case the same risk occurrence happens again.

Once you’ve identified risks relating to your business, you’ll need to analyse their likelihood and consequences and then come up with options for managing them.

Filed in: e-Magazine

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