Why your business needs a risk management plan

Even in the best case scenario, the world of business and commerce remains a volatile and inherently unpredictable space.

However, the risks and challenges facing business-owners become even more pronounced in a strained economic climate, and this is particularly relevant as Brexit uncertainty continues unabated and the world prepares for a recession in 2020. Which is where the need for a risk management plan comes in.

risk management planYour business needs to create a risk management plan with the support of legal experts such as Clifford Chance. Here are some of the other considerations to keep in mind:

1. Create more consistent and efficient operations

One of the key aspects of risk management planning is identifying the factors and issues that can create operational inefficiencies.

After all, these often unseen issues can undermine even the most successful businesses, by causing costs to increase and profitability to decline over time.

You may also have a scenario where you’re reliant on a single manufacturer for a particular part of item, and poses a significant risk in the event that they go out of business or suddenly increase their prices.

It’s important to recognise these risks and take proactive steps towards managing them, all as part of an overarching strategy that safeguards your commercial interests.

2. Boost your company’s brand image

Some risks are universally applicable to all industries, with workplace accidents, injuries and marketing errors offering relevant examples.

In the case of the latter, your business can suffer both financial and reputational consequences, as inaccurate or insensitive marketing efforts can create a public relations disaster and tarnish the company’s carefully cultivated brand image.

However, you can create a risk management plan to help identify marketing pitfalls and develop a set of guidelines for all advertisers to follow, whilst also sending a positive message to your key stakeholders and customers.

This certainly creates a sense of assurance amongst your employees, and allows them to work within clearly defined boundaries that protect all of the relevant parties.

3. Save your business money in the longer-term

On a final note, it’s important to recognise that identify risks and creating an effective management plan can save your company considerable sums of money over time.

The reason for this is simple; as your risk management plan can encompass a whole range of business disciplines and practices, from finance and operations to marketing and your firm’s health and safety strategy.

Even on a fundamental level, a risk management strategy can reduce the likelihood of workplace accidents, and the subsequent cost involved with paying compensation.

Make no mistake; the cost human and financial cost of litigation can be huge, so it’s important to prevent injuries from occurring whenever possible.