How to Minimise Business Risks
Business risk is a growing concern, especially in today’s fast-paced economy.
It is essential for business owners to identify and understand the specific risks their businesses face every day.
It is equally important to take control of these risks and determine how to best minimise harm.
For each potential risk, an effective system of internal controls can be implemented to minimise business risks.
Evaluate business risk
It must be recognised that it is inevitable unforeseen circumstances will occur.
It simply isn’t possible to protect a business from every risk it will face in its lifetime.
However, business practices can help mitigate risks through management plans that directly insure against a business’ specific risks.
Risk can be categorised into two classes; health and safety risks and financial risks.
Health and Safety risks
The following four measures could help to manage health and safety risks at the workplace:
- Identifying hazards – find out what could cause harm;
- Assessing risks (if necessary) – understanding the nature of the harm that could be caused by the hazard, how serious the harm could be and the likelihood of it happening;
- Controlling risks – implementing the most effective control measure that is reasonably practicable in the circumstances; and
- Reviewing control measures – ensuring control measures are working as planned.
It is crucial every business owner sets up the correct business structure and procedures within that structure not only to protect the business but also the owner’s personal assets.
Be sure to watch this space for Butlers Business & Law’s upcoming News for everything you need to know about Business Structures.
The following are some practical management systems and procedures to limit liability from business risks. These will effectively help to minimise the possibility of a business owner and their business from being sued or attacked:
- Implement cash flow systems;
- Implement workplace occupational health and safety systems;
- Undertake continuing professional education if you are a service provider;
- Implement up to date manufacturing processes if you are a manufacturer of goods;
- All businesses should have adequate insurance cover such as WorkCover, Public Liability, Professional Indemnity Insurance and;
- Ensure directors and officers have liability insurance.Want to know what a business structure could do for your business? Please don’t hesitate to contact our experienced Newcastle commercial lawyers at Butlers Business and Law on (02) 4929 7002 or fill out an enquiry form on our website.