What makes a good risk management plan for a business? This question is hard to answer in a short blog post. However there are 5 fundamental steps that every plan should have in order to help a business succeed. I will outline them below.
The first is a systematic and organized method to discover risk in your business. This is a process of asking questions. This "discovery" process is the first solid step in a good risk management plan.
The second is identifying and listing the risks you discovered in the first step in an organized ranking and evaluation of importance. Determining which risks need to be addressed and mitigated, is the important second step.
Like the old saying goes "what gets written down gets accomplished'. This brings us to the 3rd step in a good risk management plan which is developing a written strategy to deal with risks. Think of it as writing down goals for the business, only they are risk elimination goals.
Tactical execution is the 4th step in a good risk management plan. This is were you roll up your sleeves and do the work necessary to reduce risk. This is the step where many businesses fail. The stakeholders in the business have to follow through.
The final step in a good risk management plan is monitoring and refining the working plan. Every entrepreneur knows things constantly change in business. This includes risk.
To summarize, the 5 steps in a good risk management plan are, Discovery, Identification, Strategic Solutions, Tactical Execution, and finally Monitoring. As always reach out to your insurance and risk professional to get you started.
Until next time be careful out there and know your risks.
Posted by: G Kevin Nemith, President, CNC Insurance, Pfister Insurance. Members of The Hilb Group of the Mid-Atlantic
www.cncinsurance.com www.pfisterins.com www.hilbgroup.com
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