Risk management in uncertain times
Risk management should be central to every business.
At Porters CA – Chartered Accountants we see two key imperatives – (A) achieve your goals; (B) manage the risk of not achieving your goals. Simple really.
Invest in solutions that will improve your business performance and resilience in all cases such as remote working capability, duplicate supply options, multiple unrelated revenue streams, strong client communication channels, robust funding arrangements, documented operating systems.
Where do you start?
- People first – look after yourself, family, staff, customers. Be alert to people in a high risk category or with family members at risk.
- Cash management – reduce discretionary spend, collect debtors, be careful of making high value commitments, build a cash buffer
- Supply chain – which suppliers are critical to your business? What could go wrong? How would you fix it?
- Customer demand management – how will you respond when demand slows? How will you reduce costs? Do you have a funding buffer?
- Business continuity – how will your business continue in the event of an external shock?
- Insurance – are you covered? What for? Is it enough?
Know the warning signs and act decisively.
Do this right and you will cover many more issues than coronavirus – supplier insolvency, bike accident, unexpected resignation, IT hacking event, serious illness, bushfire, flood, etc.