In Part 1, I covered the main types of risk you need to be aware of.
In Part 2, I’m going to specifically cover how i deal with risk.
If you have not read post 1 then I would suggest you do before reading this post.
Like all things in my business, I like to have a system and a framework.
I would encourage you to go through this framework when you do your business planning.
➡️ Step 1) Acknowledge
Every business has risk. Including yours!
It’s ok to have risk. It’s not ok to pretend you don’t.
➡️ Step 2) Awareness
Now that you acknowledge that you have risk now it’s time to bring some awareness to what specific risks you have in your business.
You can’t mitigate or remove risks you do not know about.
Spend some time thinking about the following and write a list:
“What could go wrong?”
“Do I have any concentration risk?”
“Do I have any obsoletion risk?”
“Do I have any keyman risk?”
“Do I have any financial risk?”
“Do I have any platform risk?”
(Refer to part one for explanations on these types of risks)
This is a big hint:
I also asked Mentors and other business owners to help me identify risks i have missed.
People who have done it before are the best for this!
➡️ Step 3) Mitigation.
Now you know what risks are specific to you it’s time to counter them!
Every risk has a counter.
Make a list of your risks and next to them lets put in a counter that removes or minimises the risk
Peers and mentors are incredibly useful here also.
As sometimes there are easy measures we can put in place that we are just not aware of.
Here is a list of some risk mitigation strategies.
(there are many more)
– Increase your cash reserves
Cash solves a lot of problems if something goes wrong.
An easy counter to a lot of risks is to put some cash aside for a rainy day
Many companies will sell you as a way to reduce your risk.
Make sure your business is covered.
– Keyman risk mitigation
Make sure you have well-documented systems and 2 people can do every requirement of the business
– Concentration risk mitigation
Put a 12-month contract in place with the current client who is a concentration risk.
Put resources into getting more clients to reduce the % of revenue the client is responsible for.
– Platform risk mitigation
Start using multiple platforms and own your own assets (websites, followers, email lists)
Have a list of alternate solutions ready if a software should disappear.
➡️ Step 4) Apply
Now that you have your list of risks with the counters it’s time to roll them out.
I’ll admit this is not a fun activity but, you will sleep very well when it’s done
Keep in mind if minimising risks in your business increases your costs you will need to consider raising your prices or increasing your volume to cover the expense.
➡️ Step 5) Review & Repeat.
This is a task that is never finished.
I would highly encourage you to review and repeat this process a few times a year.
Sometimes winning is measured by losses avoided over ground gained!
Let’s reduce some risk!