Tips to Maintain Safety and Manage Risk as a Growing Business
Starting a business is challenging, almost nerve-wracking. On top of everything, protecting your assets, ensuring sustainable growth, and maintaining a competitive edge require careful consideration of numerous factors.
Growing businesses face a myriad of risks, such as compliance risk, legal risk, strategic risk, and operational risk. Luckily, there are numerous ways you can maintain safety and manage risks. Let’s take a closer look at some tips that work:
Understand the Types of Risks
As a growing business, studying the types of risks might not be your first order of business, but it can definitely help. Here’s a brief breakdown:
Financial risks – cash flow problems, rising expenses, or too much debt too quickly.
Operational risks – supply chain hiccups, equipment breakdowns, or production delays.
Compliance and legal risks – changes in tax laws, employee regulations, or industry standards.
Market risks – a competitor launching a similar product or a shift in consumer preference.
When you know what you’re up against, things become a lot less difficult. This is also the case with business risks.
Identify Risks
Now that you’ve understood the types of risks, try to pinpoint which ones specifically apply to your business, industry, or growth stage. You can look into factors like market trends, competition, or financial challenges.
Moreover, try to prioritise so you know which risks need immediate attention. Consider the worst-case scenario, and its possible consequences.
Maintain Strong Financial Controls
Finances are the backbone of all business operations. Having strong financial controls can help you manage risks and ensure compliance.
Small businesses can face issues like budget blow-ups and small financial details being overlooked, turning into big losses. Here are some steps you can follow to avoid such situations:
- Create a clear budget and update it regularly to reflect your business growth.
- Set up internal controls. Create teams, but make sure you separate duties. For instance, you might not want to let the same person handle both paying bills and reconciling bank accounts.
- Track every transaction—no matter how small. Review your financial statements often.
- Automate your invoice and bookkeeping systems.
Use a Risk Management Software
One of the most effective ways to reduce financial and operational risks is to use a risk management software. It is a digital tool that helps organisations identify, assess, and mitigate potential risks.
A reliable risk management platform will offer the following features:
- Custom risk matrices
- Risk assessment builder
- Automate alerts
- Automated workflows
- Risk intelligence dashboards
The benefits of using a risk management software include:
- Reduced costs
- Increased efficiency
- Improved decision making
- Total compliance
Pro tip: Choose a risk management platform that complies with industry-standard frameworks like AS/ISO 31000 and APRA CPS 220. This will ensure total compliance, helping your business excel.
Foster a Risk-Aware Culture
When it comes to managing risks as a small business, change needs to take place at every level. Help your team understand the importance of risk management. Encourage conversations and introduce tools so employees can speak up when they notice something off.
Creating a risk-aware culture can have a long-lasting impact on the sustainability and safety of your business.