Learn risk management before a risk arrives

The disaster in Japan is nerve wrecking and every scene of aftermath is bemoaning. There have been census on the number of people died out of the disaster but I wonder how many small businesses have perished because of this disaster. The tsunami might not repeat in Japan in the same order, but who can guarantee that in the coming years, no such disaster is impending on some other continent? The risk management strategy is a misnomer as people often find this management strategy to be undertaken after a risk has taken place. The risk management starts of much before and when disasters like Japan takes place, the need for the risk management is felt urgently.

In America, presently approximately 90% of the small businesses rely on meager employee strength of less than 10 people and there are several such organizations which run on hardly one or two employees. These businesses can be potentially bugled if there is loss of any employee. Almost every fortnight I get mails that explains how small entrepreneurs are affected by small incidents of disturbances. The whole business models turn turtle with incidents like death of a partner, severe injury of entrepreneur’s kid and so on. These incidents give away the message of high dependability of small businesses each single participant of it. Besides, it also shows how much level of vulnerability small businesses has.

I have created a brief and focused risk management plan for small business enterprises, which can be of help if implemented in the right time.

These enterprises are typically one man projects and this heavy dependence on a single person needs to be removed. It is recommended to have talks with partners who will build sufficient capability to run the business when the other partner is on leave for any emergency.

Risk management must include a through planning for the crisis period. Before any crisis has arrived, the partners and employees must sit together to distribute the responsibilities among the member during a crisis period.

Building healthy relation with clients to make the relationship stronger is a good way to make the company survive during the crisis phase. Good relations with clients are effective in the sense that it earns faith for a small business and during the emergency hours these clients can become important aids.

In case you find the task of risk management far from being simple then there is no point dwelling on what might happen. It is good to leave the task on a professional and focusing on the present business development issues. But in that case an entrepreneur will have to devote few hours in understanding the plans the professional is implementing. That way the entrepreneur can develop the skill set of managing a risk.