Whether being a business owner is something entirely new to you or you’re an old hand at it, you’re probably very familiar with the potential risks to your business. There’s always more to learn though, especially about the importance of risk management and risk assessment. Read on to brush up your knowledge.
What is Risk Assessment?
Risk assessment, which is vital to the success of any business, involves the business owner:
- Identifying and recognizing hazards in the workplace
- Evaluating or assessing any potential risk associated with those hazards
- Developing effective methods to control or eliminate the hazards
As a business owner, you can perform risk assessment regularly by walking through your workplace and observing situations or things that may be harmful to your employees or customers. Risk assessment should be a regular part of your business practices.
Regular risk assessment lays the best foundation for an effective risk management program. Once you’ve identified any possible hazards in your workplace, it’s important to evaluate how likely they are to cause harm or injury and how severe they could be. When you’ve determined those two things, you’re better able to effectively prevent potential harm to your employees or your business.
Is it Necessary?
Risk assessment is a necessary part of your business for several reasons. One reason is because hazards can affect production and decrease profits. Risk assessment can also eliminate hazards to employees, which are lawsuits waiting to happen. Last, but not least, risk assessment is necessary for your business because it’s required by law.
The Department of Occupational Safety and Health Administration (OSHA) requires businesses to carry out a risk assessment plan. If your business has five or more employees, you are also required to keep documentation verifying what steps you’ve taken to ensure it’s accurate and meets OSHA requirements.
Types of Risk Assessments
In every business, there are several components that come together to make the business whole. For instance, you may consider the computers you use in your business somewhat inconsequential, but having your system hacked could be just as harmful as a recession or loss of a major distributor. Here are some different types of risk assessments you should complete:
- Strategic risk assessment
- Compliance risk assessment
- Operational risk assessment
- Credit risk assessment
- Fraud risk assessment
- Information technology risk assessment
- Customer risk assessment
- Security risk assessment
- Project risk assessment?
What Risk Assessment Means For Your Business
Without stating the very obvious, risk assessment means that your business is safe from damaging hazards that could negatively affect your business. It not only keeps you in compliance with the law but ensures your business’ productivity, growth, and profit.
