The most well-known reason for business failures is poor management due to following the myth that “risks are minimal” New entrepreneurs do not have the expertise to run the endeavor; they commit lethal errors that an accomplished, prepared business person would effortlessly dodge. Before you know, following the myth will leave you devastated and dart failures your way.
The essence of business is to make plans and devise strategies before hand for all possible risks and situations that can stumble the foundations of your business. To be precise, those who are successful in their domain are because of a reason. The reason being staying safe under the umbrella when it rains of unfavorable consequences.
Are Risks Really Minimal?
Most business failures are due to poor management and financial instability. However, imperative is to say that not all organizations suffer from the adverse consequences of following the lead that ‘risks are minimal’. The question that is raised here is why some organizations fall to the adverse consequences and some don’t? Well, the answer is not as complicated as the question itself is. It is the essence of handling crisis and action plans that makes the differences.
Risks Associated with Unpreparedness for Disasters
The impact of a disaster can impede the occupational functioning of the employees as well as bring other stressors along for the employee and their families. The stressors may range temporary shutdown of the business, financial problems, anxiety, and other societal issues. In such a scenario the responsibility lays over the company to alleviate the stressors employees and their families are going through and provide assistance and support for coping with it. One way your business can take care of the employees is to develop Employee Assistance Plans and providers which identify the employees who need immediate assistance. These plans include services such as professional psychological and medical help for the employees to recover from emotional impact or discomfort caused by the disaster.
However, these plans can only help if strategies are set before the crisis or disaster strikes. How will employee assistance plan help when you don’t have one? This is what happens when you think that to everything, ‘risks are minimal.’ The risks are never minimal. When disasters and crisis strikes, every brick of the foundation shrinks and comes under pressure. It takes no time for a disaster in turning from mild to catastrophic. What follows ahead when you don’t take precautionary measures before hand is beyond reconciliation. You make be lucky once or twice as not being struck by the event but not every time. Sooner or later the incipient to the placid issue of ‘the risks are minimal’ needs to be faced and resolved.
Everyone deals with money concerns occasionally, managers are no exception. Financial troubles may impede productivity. However, regardless of the fact that most business men face financial concerns if you don’t take the concerns serious enough and follow the same lead “risks are minimal’ no wonder the business you have set is gonna go down the drain.
Employees are also taken aback by the financial issues let alone the consequences associated with them. Offset employees’ anxieties by providing them with a solid financial education. Teaching employees how to manage company’s money or how to prepare for financial security improves the employees’ quality of work. The money you spend teaching or hosting financial education pays for itself when sales increase or when work is achieved competently.
Having enough money to cover the bills is an unquestionable requirement for any business, yet it is additionally an absolute necessity for each person. Whether it is your business or your life, one will likely emerge as a capital drain that puts pressure on the other. With a specific end goal to take off this issue, small organizations managers should either be vigorously promoted or have the capacity to get additional wage to shore up money holds when required. This is the reason numerous small organizations begin with the authors working a vocation and building a business at the same time. While this split focus can make it difficult to grow a business, running out of cash makes growing a business impossible.
“Risks are Minimal” is a Myth: Risks are always Dangerous to take!
Being aware of the most common risks small businesses are faced with enables you to be better prepared and hence deal with them appropriately.
Business risks can be broken up into the following:
- Strategic risks – risks that are associated with operating in a particular industry
- Compliance risks – risks that are associated with the need to comply with laws and regulations.
- Financial risks – risks that are associated with the financial structure of your business, the transactions your business makes and the financial systems you already have in place
- Operational risks – risks that are associated with your business’ operational and administrative procedures.
- Market/Environmental risks – external risks that a company has little control over such as major storms or natural disasters, global financial crisis, changes in government legislation or policies
Keep in mind that not all risks will fit perfectly into one of the above categories. There may be incidents where a risk overlaps into two or more categories such as the protection of confidential information. In this example, there are laws that have to be considered, making it a compliance risk. However, the management of confidential information can also be an operational risk as it may be part of a business’ daily activities.
Yet again, ‘risks are minimal’ is a mere assumption and is going to dart your business down to drain if you don’t take the risks serious. Know what risks you face and devise strategies to help them extricate
Remember that whatever you do, never consider the risks are minimal. Risks and crisis can take minute to turn from mild to catastrophic.
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Being prepared ensures businesses and their employees have skills and resources to survive with grace, compassion and success. Crisis Prevention and Restoration, certified professionals ready to train your team before the emergency. 415.891.9107