Risks

Identifying Risks

  • Internal and External Risks: Risks can come from both within and outside the business. It’s important to consider both.

  • SWOT Analysis: This analysis tool allows you to identify Strengths, Weaknesses, Opportunities, and Threats for a business.

  • PESTLE Analysis: This looks at Political, Economic, Social, Technological, Legal, and Environmental factors that could pose risks to a business.

Evaluating Risks

  • Probability and Impact: Evaluate risks based on how likely they are to occur, and what impact they would have if they did.

  • Risk Matrix: This tool can help you visualise the level of risk associated with different potential problems.

Managing Risks

  • Risk Avoidance: Some risks can be avoided by altering business plans or strategies.

  • Risk Reduction: Other risks can’t be fully avoided, but their potential impact can be reduced through careful planning.

  • Risk Transfer: This involves passing the risk to another party, often through insurance.

  • Risk Acceptance: In some cases, it might be best to accept the risk and develop contingency plans to deal with it if it occurs.

Monitoring and Reviewing Risks

  • Documenting Risks: All identified risks should be documented in a risk register along with their potential impact and planned responses.

  • Reviewing Risks: Risks and the effectiveness of their management should be reviewed regularly.

  • Continuous Risk Assessment: The risk environment can change quickly, so it’s important to continually reassess risks and adapt your risk management plan accordingly.