Get everyone thinking about risk
Business Advice Tasmania encourages people at all levels of your business to think about risk. They should know who to talk to when confronted by a risk they’re not sure how to deal with. A side benefit is that when employees know who will manage each kind of risk, it creates a sense of structure. It also encourages people to be actively involved in the business.
Make informed decisions
Sometimes you may decide not to deal with certain risks because the chance they’ll happen is slight or the effects are trivial. On the other hand, you’ll need to plan for very likely risks with serious or major effects. For these you will need to have procedures so you can deal with them as they occur.
What is risk
Risk is something that might happen. If it does will the risk have a positive or negative impact on a business? We measure risk on a two scales of 0% to 100%, probability and severity.
Something that might happen implies a probability of less than 100%. If it has a probability of 100% – it will happen – this is not risk management, it is issue identification. Issues are managed differently to a risk and we will handle issue management. A risk must also have a probability something above 0%. It must be a chance to happen or it is not a risk.
Severity is the impact that the risk may have on a business. A 100% severity is life threatening situation for the business or individual. Similarly a 0% severity has no impact on the business.
There are four stages to risk management planning. They are:
- Risk Identification
- Risk Quantification
- Risk Response
- Risk Monitoring and Control
To discuss Risk and its impact on your business Contact us .