Risk Management Guide for Small Business
What is risk?
Risks are events or circumstances which have a negative effect on your business. The negative effect could include an employee getting injured, the business losing money or your reputation being damaged. Risk increases when an event isn’t planned for or happens differently from what you expected e.g. a downturn in the market or a flood ruining your stock.
What is risk management?
Risk management simply means to identify, assess and manage risks. By collecting information about potential risks you can make informed decisions. By making risk management an active part of your business, and dealing with risks before and as they occur, you can minimise losses.
An outline of the different types of risk your business could face.
Different ways to identify the risks to your business, including the potential consequences if they happen.
Look at how likely each risk is, and how severe the consequences will be if an event happens. Use the simple tool provided to assess each risk affecting your business.
How to build a simple but effective risk management plan for your business. The templates simplify the task of completing your own risk assessment and give you a plan for each risk. Each template includes a worked example.
One essential activity in developing your risk management plan is an emergency contingency plan. This plan can help you minimise the effects of interruptions to trade. It should include a critical information list, so if you’re out of action someone else can keep running the business.
Source: The State Government of Victoria. 2009. Business. http://www.business.vic.gov.au/BUSVIC/STANDARD/PC_50326.html
Related: Risk Management Guide for Small Business
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1 Risk management principles and concepts
1.1 Demonstrating good governance practice for small business
1.2 Defining risk and risk management
1.3 Types of risk
1.4 Drivers of risk management – why manage risk?
1.5 Limitations of risk management
2 Categories of risk in small business
2.1 What is a category of risk?
2.2 The use of categories of risk
2.3 Common risk categories in small business
2.4 Definition of risk categories
2.5 Integrating risk management in small business
3 The risk management process
3.1 What is the risk management process?
3.2 Step 1. Communicate and consult
3.3 Step 2. Establish the context
3.4 Step 3. Identify the risks
3.5 Step 4. Analyse the risks
3.6 Step 5. Evaluate the risks
3.7 Step 6. Treat the risks
3.8 Step 7. Monitor and review
3.9 Summary of risk management steps
4 Applying risk management
4.1 Who should use risk management?
4.2 Where should risk management be applied?
4.3 How much risk management is enough?
4.4 Recording the risk management process
4.5 Risk management and business size
5 Sustaining a risk management approach
5.1 Risk management framework
6 Risk management tools and activities
6.1 Risk identification methodologies
6.2 Risk analysis tools
6.3 Risk management documentation – risk management plan
6.4 Risk profile
Source: NSW Department of State & Reginal Development. Risk Management Guide for Small Business. http://www.smallbiz.nsw.gov.au/smallbusiness/Resources/Business+Tools/Risk+Management+Guide/