As the 2nd half of 2020 commences the world-wide economic and social landscape has changed irrevocably with the arrival of Covid-19. For businesses both big and small it is essential that your 2020 business plan has been reviewed and updated to ensure that there is a functional process embedded within it for the continual identification, monitoring, and action of potential risks that may either directly or indirectly impact the success and survival of the business.
Small Risks
For small to medium-sized businesses it is crucial to clearly identify the immediate risks impacting your business. Pre Covid-19 most small to medium businesses would have had several key risks clearly identified. These would include:
- Managing cashflow
- Customer / staff retention
- Business processes
- Cybersecurity
- Increased regulation
Prior to Covid-19 how many small to medium businesses would
have had a functional pandemic plan in place?
What about plans and processes to allow staff to work
remotely / offsite?
What about interruptions to the supply chain(s) that support
the business? (short and long term)
Most small to medium businesses will have in recent months hastily
developed and implemented these types of plans firstly to meet health and
government regulation and secondly to ensure that the business would continue
to trade and remain solvent.
For the foreseeable future risks will be emerging on a daily
basis emerging in many forms and in many new ways that will require immediate
and positive action to either eradicate or mitigate within the business.
As summer approaches the threat of bushfires will again grow to add another level to the risk for all businesses.
In the Covid-19 world risks now occur more frequently and
unpredictably.
Work, Health, and Safety and government regulations are evolving on a daily basis adding additional administrative and economic impact to a business. Like Covid-19 the earlier a risk is identified and actioned the sooner the impact on the business will be mitigated or eradicated.
Critically it is vital that businesses ensure that all their
existing workflows have been reviewed and updated – assuming that existing
business processes will remain viable is now no longer an option for any
business.
Maintaining and monitoring both customer and staff wellbeing
is now more essential than ever – the cost of losing (or not retaining) customers
and/or staff either temporarily or permanently will cost the business immediately
and in the longer term.
Small and medium-sized businesses also face threats from new competitors entering the market – competitors that may have advantages such as new and modern digital and computing platforms, and more diverse supply chain options. Businesses that fail to update and upgrade existing business processes face the prospect of losing sales and market share to these new entry-level businesses.
Big Risks
What are ‘Big’ Risks?
Why are Big Risks important to Small and medium businesses?
‘Big’ risks are things that are generally reported in the media on a daily basis and discussed in business offices, cafes, and homes every day. Whilst a small to medium business owner may focus on their sales, customers, staff, and business environment ‘Big’ Risks need to be monitored and factored into a risk management plan for any business.
Big risks include issues such as international trade wars, changes to government support, taxation and expenditures, environmental/natural disasters (Covid-19, bushfires, drought, cyclones), economic recessions amongst trading partners, and cybersecurity and theft.
The biggest risk businesses of any size face today is ignoring or failing to identify both the big and small risks that emerge and making and taking immediate and positive action to address any actual or potential impact on the business, its customers, and employees.
Dean Gibson- Head of Business Intelligence , Mindful Risk
September 2020