Threats that have the potential to ruin a business’ profitability and longevity exist in every field. Your business may have been particularly unaffected by disruptions or crises in the past, but if the previous two years have taught us anything, it’s that risk is always around us, and before you have had the chance to realize it, one wrong move or one disaster can have long lasting, detrimental consequences on your business. The practice of risk management involves identifying and quantifying potential threats that could impact your business, and using strategies to mitigate the potential impacts of these risks.
Risks in business are inevitable, and can arise from natural disasters, IT disruptions, management errors, reputational impacts, workplace injuries and legal liabilities. Considering the nature of a risk, the potential it has to disrupt business operations and operational alternatives will help your business determine which of the risk mitigation strategies to apply. In risk mitigation, there are four key mitigation strategies:
- Risk Acceptance
- Risk Avoidance
- Risk Transference
- Risk Reduction
Risk acceptance involves accepting the potential negative impacts a risk may bring as it may cost more in time and money to try to mitigate the risk. These risks are usually minor and infrequent risks. Risk avoidance involves stopping a certain operation altogether to ensure that such operations cannot create the opportunity for specific risks to arise. Risk transference involves using an insurance policy, or other entity, to transfer risk to a third party, should it arise. Risk reduction involves continuing with a certain operation that could be risky, but by implementing specific strategies to mitigate the risk, it can reduce the harm it may bring. Assessing the risks that exist and then applying these strategies can prevent detrimental impacts to your business and its profitability in both the short term and long term.
Put your business in the safest hands possible. The knowledgeable and friendly team at Resilient Services are passionate about safeguarding your business and its operations from the crises and disruptions the world may bring. Resiliency and continuity are key considerations that underline Resilient Services’ approach to making your business stronger, smarter and more secure. Contact the team today for more information.