Building and growing a business is challenging enough; there are so many factors to consider in order to continue to grow your company where you want it to be.
But what if something happened to grind your business to a halt that could have been predicted beforehand? Because of this and other factors, you must take the time to establish a risk management plan for your business if you haven’t already done so.
Granted, managing risk is the not-so-fun part of running a business, but it is a necessary evil to avoid jeopardizing everything you and your management team have worked so hard to create and grow.
To make it easier for you to get started on the process, here’s a list of four steps you need to take today to minimize risk within your business.
#1 – Search and Identify Your Business Risks
In order to determine how to protect your business against undue risk, you must first determine what you need to protect yourself from! Look through every area of your business and identify areas where the greatest possible risks could lie. For example:
- Business development efforts
- Employee expense reports
- Strategic management errors
- Legal liabilities
- Employee computer files and your network
#2 – Assess the Nature and Severity of the Risks You’ve Identified
Let’s say you’ve identified that employee fraud in the form of employees cheating on their expense reports is a real risk to your organization. First, determine the likelihood of this happening.
- Do you have a large number of salespeople?
- Are they required to submit dated receipts with their expense reports?
- Do you have a manager who thoroughly reviews each expense report?
- Have you had a problem with expense report fraud in the past?
- Do your employees have company credit cards that could be compromised or stolen?
If you answered “yes” to a majority of these questions, then we can understand why you’ve identified employee fraud as a risk. That said – compared to other potential risks you identified, do you stand to lose a substantial amount of money if there is fraud in this area? Maybe not.
That doesn’t mean expense report fraud isn’t a risk and isn’t important. However, it probably doesn’t pose as big a threat as, say, your company’s network not having a firewall, for example. Start ranking your potential risks by largest to smallest, with the largest being the risks that could do the most damage to your company’s ability to continue operating.
#3 – Develop Risk Remediation Strategies
Now that you’ve identified your risks and ranked them according to the highest potential threats, you can now work on remediating your risks in a manner that’s repeatable and sustainable over time.
For example, if your company doesn’t have a firewall in place to prevent your network from outside attacks, you’ll want to contact a service provider that can install and monitor this for you if you don’t have an IT department at your company.
In addition, NobleBank has several benefits in place that can assist you with your risk remediation strategies. They include:
- Our Payroll Services are the perfect solution to having a third-party team handle this area of potential risk to your company. We handle such things as payroll tax deductions and filings, HR tools such as business guides and forms, employee access to online pay stubs, W2s and 1099s, and many other beneficial features.
- Our ACH Origination service permits you to offer draft payments from customers or pay vendors electronically. No more fear of a check getting lost in the mail or stolen. This can simplify your collections process (another potential risk to your business) and dramatically reduce the risk of fraud.
- Eliminate the unlimited spending possibilities of corporate credit cards issued to employees by instead using our BizNOW Prepaid Cards. Designed specifically for small to medium-sized businesses, these cards allow you to get rid of risky and inefficient practices while helping to maintain your cash-flow management and make your expense report process more simple.
- Should you choose to continue using company-issued credit cards, our Cardholder SecurLOCK Fraud Service Center can be set up to send you alerts anytime there is suspicious or unauthorized activity on any of your employee’s credit card accounts.
Don’t Put Off Risk Management Planning Until It’s Too Late
A little bit of risk management upfront prior to anything catastrophic happening within your business is well worth the time in the long run. With all of the lofty goals you have for growing your business, don’t let a crack in your business planning derail you from achieving the success you’ve dreamed of for your business.
And as always, please don’t hesitate to reach out to one of our Business Bankers for more advice on other risk management tactics that can help you close the gaps on risks your business faces.
Trust Your Business Risk Management Needs to NobleBank & Trust
NobleBank’s slogan: Friendly. Proactive. Professional. A community bank with “big bank” services and technologies, NobleBank meets the needs of our community and builds value for our customers in a way you won’t find at other banks. Click here to find a location throughout Central Alabama near you, or give us a call for a consultation that addresses your unique business needs at 256-741-1800.