Protecting Your Company From Risk, Part 3 - January 3, 2018
In this series, Promotional Consultant Today has been sharing key insights into risk. We discussed how to identify risk factors and how to measure and manage the potential impact of these risk factors to your business.
Types of risk vary from business to business, but preparing a risk management plan involves a common process. Today, Promotional Consultant Today shares these tips on how to develop strategies for dealing with risks specific to your business.
Review and update your risk management plan. The first key step is to write your plan. This should include the budget, time and resources it will take to prepare and protect your business. Begin by documenting each risk factor and impact rating. Then include the key roles, key steps, budget and resources needed.
Next, you will need to test, evaluate and update your risk management plan regularly as risks can change as your business, your industry and the environment in which you operate change. Regularly reviewing your risk management plan is essential to identifying new risks and monitoring the effectiveness of your risk treatment strategies.
Consider business continuity. Your risk management plan should also be part of a broader business continuity plan that includes strategies for responding to and recovering from incidents if they do happen. Making sure your business continuity plan is reliable and up to date will help you resume operations quickly after an incident and reduce the impact to your business.
While you may be able to predict and deal with a large number of potential risks, there will be some that are unexpected or impossible to plan for. Preparing an incident response plan and a recovery plan as part of your overall business continuity plan can help you deal with these situations.
Conduct a business impact analysis. Once you have developed a risk management plan, you can conduct a business impact analysis to assess the likely impact of these risks on your business operations.
A business impact analysis identifies the activities in your business operations that are key to its survival. These are referred to as critical business activities. You should consider things such as:
- the records and documents you need every day
- the resources and equipment you need to operate
- the access you need to your premises
- the skills and knowledge your staff have that you need to run your business
- external stakeholders you rely on or who rely on you
- the legal obligations you are required to meet
- the impact of ceasing to perform critical business activities
- how long your business can survive without performing these activities
Also, assign recovery time objectives to each activity to help determine your basic recovery requirements. The recovery time objective is the time from when an incident happens to the time that the critical business activity must be fully operational in order to avoid damage to your business.
Key questions in a business impact analysis include:
- What are the daily activities conducted in each area of my business?
- What are the long-term or ongoing activities performed by each area of my business?
- What are the potential losses if these business activities could not be provided?
- How long could each business activity be unavailable (either completely or partially) before my business would suffer?
- Do these activities depend on any outside services or products?
As the risks to your business change, so too will their potential impact. When you update your risk management plan, you will also need to conduct a new business impact analysis.
Don't wait or put off developing your risk management strategies. Make it a goal in 2018 to complete these important plans before you need them.
Source: The www.business.qld.gov.au site is a portal to help Queensland businesses improve their operation at all stages, from starting and running, to growing a business. It provides information, support and tools for Queensland business owners and industry sectors.