Projects » Education, Employment & Investment » Roadshow » Topic 8. Risk Management

Topic 8. Risk Management

Projects » Education, Employment & Investment » Roadshow » Topic 8. Risk Management

Topic 8. Risk Management

Risk Management

It is possible for a business to open, operate and close after several years of successful trading and for nothing bad to happen along the way. It is possible, but not likely.

Risk Assessment

Risk is assessed by evaluating the likelihood of an event occurring and its impact. Whilst the likelihood of a meteor strike is remote, its impact would be devastating. Group risks by category – e.g. physical, business or compliance, and then evaluate their likelihood and impact. Examples of risks:

  • Physical risk. Customers entering a mechanics workshop and injuring themselves.
  • Business risk. Sales drop and a business is unable to pay back a business loan.
  • Compliance risk. A staff member checks their superannuation account and discovers the business is behind in its superannuation contributions.

Once risks have been identified they should be prioritised, with focus given to the risks with the highest risk rating.

Risk Management Planning

There are several strategies for dealing with risks – avoidance, mitigation, outsourcing and acceptance. APIA Insurance avoids insuring young drivers to keep their premiums lower, mechanics mitigate risk by posting signs warning customers to ‘Keep Out of Workshop’, we outsource the cost of medical treatment for staff injured at work to our Worker’s Compensation providers and we simply accept the fact that a meteor may land on our business tomorrow. Develop an appropriate risk management strategy for each risk, starting with the highest priority risks. 

Safety Culture

Share your risk management plan with your team. Implement your management strategies, make the work environment safe, post signage, provide training and ask each of your team members to sign off on your updated procedures. Then lead by example and adopt a ‘zero tolerance’ approach to workplace safety and risk management. Bad things happen, you have been warned!

For more on planning to manage risk, visit http://toolkit.smallbiz.nsw.gov.au/ search ‘Risk’.