What constitutes a risk to your business? It could be as straightforward as a tax bill you didn’t expect or as comprehensive as a natural disaster. If the first half of this year is anything to go by, natural disasters can be devastating. It’s important to assess the type and level of risk and develop strategies to cope.
We’ll be heading into a new year soon and it’s a great time to take a common-sense survey of your business to check everything that could damage your business and take some sensible precautions.
Some of this is straightforward – if you know how much your monthly wages bill is, you know that amount must be there for payday. Some things you can plan for; others you can’t, such as fire, or extreme weather conditions. However, you can consider how to minimise possible damage and take out appropriate insurance.
Run a risk audit. Touch base with advisors to make sure you cover everything. Assess whether insurance cover is adequate. Run regular checks to ensure the systems in place continue to be practical for the risks that face your business.
If your business has a board of directors or a family advisory board, at the next meeting look at the systems to assess and manage risk along with monitoring factors which affect business performance.
As your Accountants, we are here to help and advise you. At your next meeting, ask us what we think you need to look out for. From discussions with you, we’ll be able to point out items to review that may affect your bottom line.
Your plan should be reviewed regularly and updated to allow for current conditions, changes in economic conditions, conditions your suppliers or customers may be facing and more.
Heading in to a new year is often a good time to review the year that was. If you’d like more guidance or to discuss specific items of your business, please let us know so we can tailor your meeting accordingly.
Here’s a simple risk management plan template to get you started if you don’t have one. The plan contains example risks – you can adapt or replace these to suit your organisation. Before you start, read the guide as the prompts they mention are really helpful.
As always, if in doubt, talk it out – we’re here to help.