4 tips for managing risk control as a business owner

 March 19, 2021     UFG Insurance    Business  Read Time: 5 min
Risk management tips

Risk is everywhere and often unseen until it's too late. From natural disasters to pandemic-related shutdowns, it's hard to account for all the different things that can impact your business. Fortunately, solid risk control management can help lessen the blow to your wallet.

Risk control refers to the process of evaluating potential losses (whether of money, time, effort, etc.) and taking action to prevent or reduce them. It's a foundational aspect of business — if you're losing money, you can't make money — and most business plans dedicate an entire section to it.

The risk control process will look different at every company, of course, but it will typically focus on two main types of risk:

  • Internal risk, which is one that comes from inside your company during normal operation — an employee accident, a crashed computer or an overflowing drain.
  • External risk, which comes from outside your company and normal operations — natural disasters, changes in the market or new regulation.
As you can imagine, that potentially covers a lot of ground. So how can you best manage your risks while also making time to work in your business? Here are four tips to get you started:

1. Focus on the right risks.

You could spend every day thinking of newer and scarier scenarios that could affect your business, but how much of that is really likely to happen? It's hardly productive or cost-effective to insure and protect your business from every single contingency out there, so you've got to focus where it counts.

According to the U.S. Small Business Administration, the biggest risks to a business are those that impact cash flow and your ability to generate revenue. If you’re unable to meet your monthly expenses or your credit dries up, your business could be in jeopardy quickly.

Make sure you’re focused on those risks that present the biggest threat to your company’s financial health and evaluate your risk profile regularly.

2. Develop a business continuity plan.

Risk control management isn’t just about avoiding risk — it’s about reducing its impact when the worst comes to pass. That's where a business continuity plan comes in. This document details how operations should continue in the event of a disaster or major disruption. Your plan should address every part of the business that could be affected, including processes, assets, technology, employees and customers.

If you don’t have a business continuity plan in place, now is the perfect time to create one. If you do have a plan, consider giving it an update. Read more about business continuity plans here

3. Educate your employees.

It’s not just the owners or the business management team that should be looking out for risk — it’s a job for employees, too. From trip-and-fall hazards to workflow flaws, your employees are in a unique spot to identify and reduce risk before it can cause real damage. Share your business continuity plan with your team and be proactive about discussing and updating your plans from their feedback. 

Checklists can also be helpful for keeping your team on the same page and mindful of common risks in your industry. UFG’s risk control department offers a variety of convenient guides and checklists to help keep your team safe.

4. Get help from the pros.

It can be difficult to see the threats facing your business when you're busy working on it. That's why it's important to build a team of professionals who can help manage your risk control efforts. It starts with your business insurance agent, but can also include risk and safety consultants, accountants, or attorneys, depending on your specific situation.

If you’re a UFG policyholder, reach out to our risk control experts today if you need help formulating your plan. A little bit of preparation now can help keep your business humming in the future, no matter what events arise.
 

The information provided is for informational purposes only. Every attempt is made to ensure that the information is accurate; however, it is not intended to replace professional advice. For more information, see Disclaimers & Other Legal Documents.