hether you’re running a small or large business, it’s important to have an effective risk management program in place to ensure your business is safe. Having the most effective risk management often requires customizing it to meet your business' needs. Although it sounds straight forward, it can be tricky. How do you know if your risk management is all it needs to be? Here are some signs of poor risk management.
Internet Security Invasions
The Internet plays a major role in our lives, and an even bigger role in business. Most businesses store almost all their data and information on cloud servers. Without adequate anti-virus, anti-malware, and Internet security software, your entire business is at risk of fraud, identity theft and more. If your computer system is compromised even once, it’s a sign that you may not have adequate security software.
When your system is invaded, you and your business are not the only two at risk. Your customers, clients and anyone involved in your business may also be compromised. Your reputation will suffer too when customers are told that you did not keep their information safe.
Poorly Insured Property Damage
As a business owner, there are many things that are within your control. For example you can't prevent property damage from theft, vandalism, tornadoes, or other natural disasters. You can, however, control how well you are insured against such occurences. If your business has suffered any kind of loss that couldn’t be recovered because you purchased an inadequate insurance policy, this is a real sign of poor risk management.
Employee Theft and Embezzlement
It’s often said that your company is only as successful as the people you have working for and with you. If you have an employee steal from you, it may be the result of an unfortunate circumstance or a poor hiring decision. However, when businesses find themselves victims of employee theft or embezzlement more than once, it’s often a sign of poor risk management due to improper screening of potential employees.
When hiring new employees, it’s important to screen them carefully and require they submit to criminal background checks. Theft, embezzlement, and vandalism can also be prevented with a high-quality security system.
Financial Insecurity
Another sign of poor risk management is finding your business at risk of bankruptcy or financial ruin if you suddenly can’t get funding you had anticipated. To be successful in your business, it’s important to have both a Plan A and a Plan B in place. Businesses who have poor risk management often have insufficient inventory because they have inadequate cash flow and have over-extended themselves. To ensure the most success with your business, it’s vital to always have an well-planned and effective risk management program in place.
