How to reduce and manage business risk
Taking risks is a fundamental part of being an entrepreneur, but risks that harm your business should be avoided.
This guide outlines how to identify, reduce, and manage risks to your business.
Business risks are factors or events that could threaten your business.
Identifying and controlling all potentially harmful risks, such as increased competition, health and safety issues, third-party legal claims and supplier failure, is key to ensuring your business is resilient.
This is particularly important when economic conditions are challenging.
What are small business risks?
Risks are factors or events that have the potential to negatively impact a business's operations, objectives, or finances.
Risks can be divided into internal and external risks.
External risks – factors outside your direct control, such as an economic downturn, natural disasters, and changes in regulations.
How to control business risks
A risk register is used to evaluate and record all business risks, detailing how they can be reduced or managed.
It will help you to focus on the highest risks affecting your business.
You can search online for a risk register template.
How to monitor business risks
Your risk register needs to be regularly reviewed.
It should be updated when new risks occur, or existing ones change.
You should also check that the actions outlined in your response plan are being carried out effectively.
A new person should be identified if a risk owner leaves the business or another factor prevents them from carrying out the role.
Provide relevant training if it is needed.
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Reference to any organisation, business and event on this page does not constitute an endorsement or recommendation from the British Business Bank or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.