Businesses around the world, live and die, by their risk understanding. Everything is a risk. If you want to invest in a product, you must risk the money you’re funding it with, to be wasted and the product failing. But with that risk, comes opportunity. And the product could be a success, turning your investment into a profit, ten times the amount. But without proper risk identification, you are going to be taking a stab in the dark. Most small business owners don’t understand the process you need to make an informed estimate and guess about a project. So, we are going to educate you on risk identification and why it’s important.
Risk brainstorming
When you are thinking of a new idea, you should involve a risk management professional. They will ground your feet to ehr floor. But, be ready to hear the word ‘no’ a lot! They will tell you what can and can’t be done, but not, what you should do. In other words, they are you guiding light in a maze of possibilities. It won’t show you the way out, but they will show you where you’re going and shine a light on any pitfalls and dead ends. So when you are brainstorming about a new idea, such as a new product, a new service, or some kind of improvement to your current systems, allow a risk manager to be involved.
Worst case scenario
A risk manager’s role is varied and one of the things they do is a plan for the absolute worst-case scenario. They will show you what could happen if the project went downhill in the worst way. The idea behind this task is, to show you what the ultimate risk of anything you do, is. They will never tell you what you shouldn’t do, but they will show you why certain things aren’t possible. This is called their ‘pessimistic thinking task’ or PTT for short. They will run you through a PTT report section, which will highly the following.
- Risk of maximum financial loss
- Reputational damage
- Customer frustration
- Competitor inferiority potential
- Operational challenges
- Employee stress
The most modern risks
The most relevant risk identification for your business is modern risks. The most modern challenges are all in the cybersphere. Cyber Security is a top priority as over 40% of small businesses will be attacked by hackers and malware, at least once in their lifetimes. So, improving your network security like the level that Intouch IT can offer, is just one example of how to respond to this risk. They have firewalls, server protection, encryption and data analysis to name a few things. They will not run on assumptions, they have a vulnerability scan which assesses where you are most likely to be attacked.
Risk identification is a complex and time-consuming task. However, it’s so crucial for any new task because you can nip any holes in your ideas, in the bud and save money and time in the future.