Risk is the loss and harm that one could potentially incur. Small businesses cannot afford to ignore risks. With nearly 160 billion (yes, billion) of the 347 billion in business spend on liability costs coming from small businesses, risk management is a small business imperative.
But you’re small, so you have to be practical about it. The good news is that you don’t need a complicated risk management strategy or compliance program to pay attention to and take steps to protect your small business from risk.
FIRST
Know your industry. What types of risks are common based on your industry. Is it a highly risky industry? Are you teaching people how to sky dive? Are you hosting extreme adventures? The risk profile for your business will be very different from someone who is running an accounting practice.
NEXT
Get the basics—general liability insurance. At minimum, secure general liability insurance for your business in an amount that is suitable to cover your known risks. If someone is injured at your store, you want to have comfort that the liability will be covered.
THEN
Get educated on the laws and regulations that impact your business and make sure you are in compliance with them. Train your team and ensure they are equipped to perform in a manner that limits risk. For example, if they work at a construction site, they should be wearing appropriate safety equipment and have undergone the proper training. Ensure the training is an ongoing part of their job responsibilities.
FINALLY
Take the lead by modeling right behaviors. Create a culture where your employees feel comfortable raising issues should they notice them.
Take the lead by modeling right behaviors. Create a culture where your employees feel comfortable raising issues should they notice them. Responsibly managing risk is a full team effort.