If we don’t succeed we run the risk of failure!

Posted on by Mark Fernandez

Every aspect of our life involves risk. It’s something we’re exposed to every day. Yet when we go about our daily tasks how often do we think about it? Probably not that often, and even when we do we’re not too worried…  Why? Because it won’t happen to me!

With the recent natural disasters both in Australia and overseas we can see first hand the devastating effects they have on our society. But did you know, even with these events in clear view, over half of all small businesses are not insured against business interruption, and many underinsure their assets! This begs the question of why? Are they not aware of the risks? (which, in recent times seems pretty unlikely) Or do they not consider the risks to be a likely occurrence?

Before visiting an insurance broker (or deciding not to!), it’s important to consider how your business would cope if something bad were to happen. What are the key drivers your business could not go without? How would you cover the fixed costs? Who is in-charge in such as event? Remember that risk includes many areas, not just natural disasters. Anything that affects your business including competitor behaviour, market conditions, supplier issues, and many more, is a risk. For this reason having a risk management strategy is fundamental to any business.

Developing such a strategy involves a detailed analysis of your business and objectives and the environment it operates in. The risks that your business faces can be defined in terms of how likely they are to happen and how costly they would be. Similarly strategies to mitigate these should depend on how the risks would affect your business.

There is no one size fits all when it comes to risk management. Each business is unique, so insurance programs should match the specific risks the business faces.

With a tailored program designed specifically for you, you may soon find that insurance is indeed value for money, even if you thought it would never happen to you!

If you would like to discuss risk management for your business contact Mark on (08) 9364 3811 or mark@bda-online.com.au

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