What are your strategies for minimizing operational risks in your small business?

1 Identify and assess your operational risks

The first step is to identify and assess the operational risks that are relevant to your small business. You can use various tools and methods, such as brainstorming, surveys, interviews, checklists, audits, or risk matrices, to gather information and data about the sources, likelihood, and impact of different risks. You should also consider the interdependencies and correlations between risks, as well as the potential scenarios and consequences of risk events. By doing this, you can prioritize the most critical and urgent risks that need your attention and resources.

2 Implement risk controls and mitigation plans

The second step is to implement risk controls and mitigation plans for the operational risks that you have identified and assessed. Risk controls are the actions or measures that you take to prevent, reduce, or transfer the risks, such as implementing policies, procedures, standards, training, backup systems, or insurance. Risk mitigation plans are the contingency plans that you prepare to respond to and recover from the risk events, such as defining roles and responsibilities, communication channels, escalation procedures, or recovery steps. You should document and communicate your risk controls and mitigation plans clearly and regularly to your staff, stakeholders, and customers.

3 Monitor and review your operational risks

The third step is to monitor and review your operational risks on an ongoing basis. You should establish and use key performance indicators (KPIs), key risk indicators (KRIs), or other metrics and tools to track and measure the effectiveness and efficiency of your risk controls and mitigation plans. You should also collect and analyze feedback, incidents, complaints, or suggestions from your staff, stakeholders, and customers to identify any gaps, weaknesses, or opportunities for improvement. You should review and update your operational risk management process periodically or whenever there are significant changes in your internal or external environment.

4 Learn and improve from your operational risks

The fourth step is to learn and improve from your operational risks. You should use the information and data that you have collected and analyzed from the previous steps to identify and implement best practices, lessons learned, or corrective actions for your operational risk management process. You should also share and celebrate your successes, challenges, or failures with your staff, stakeholders, and customers to foster a culture of risk awareness, transparency, and continuous improvement. By doing this, you can enhance your resilience, performance, and competitiveness as a small business owner.

5 Seek expert advice and support

The fifth step is to seek expert advice and support for your operational risk management process. You may not have all the skills, knowledge, or resources to handle all the operational risks that your small business faces. Therefore, you should consider outsourcing, partnering, or consulting with external experts or professionals who can provide you with specialized guidance, assistance, or solutions for your specific operational risk issues or needs. You should also leverage the networks, communities, or associations that are relevant to your industry, sector, or niche to learn from the experiences, insights, or best practices of other small business owners who have faced similar operational risks.

6 Involve and empower your staff

The sixth and final step is to involve and empower your staff in your operational risk management process. Your staff are the ones who execute your daily operations, interact with your customers, and deal with the operational risk events. Therefore, they are a valuable source of information, feedback, and ideas for your operational risk management process. You should encourage and enable your staff to participate in identifying, assessing, controlling, mitigating, monitoring, reviewing, learning, and improving from your operational risks. You should also provide them with the necessary training, tools, incentives, and recognition to motivate them to take ownership and accountability for your operational risk management process.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?