Sounds boring but you won’t want to skip it

I just read an article called “Liquidity, Crime Woes Shake Up Chief Risk Officers” at CFO.com. I suspect I lost about half of my blog readers just reading that sentence. Nothing seems quite as boring as words like “liquidity”, “risk”, and “CFO”. It’s all I can do to stay awake.

But it’s important for small businesses to understand this stuff. The problem is, small businesses don’t buy into the importance of risk management until they become bigger. They are just as exposed to risk as bigger companies but they are often underinsured, over-extended, and ill-prepared for when risks become realities.

If you are breathing a sigh of relief because you are still in business after what seems like the worst of the recession is over, STOP feeling relieved. Your business is still in danger. And many businesses (perhaps yours?) are not prepared for risks.

Please take a moment as soon as you are done reading this blog and list the potential things that could happen to you. Then, figure out how to prepare for it. (Yeah, it’s depressing. Yeah, you’d much rather be playing with your cat or doing billable work. I get that. But risk preparation will save you thousands of dollars and hundreds of hours of your time.)

For example, if you live in an area where hurricanes are frequent, think about how your business can continue should a hurricane strike. Will your customers get their work if you lose power or experience flooding? A solution might be as simple as getting work out the door as quickly as possible and saving all work to multiple off-site servers.

I don’t need to tell you that mother nature isn’t the only potential risk that businesses face (it’s just often the least predictable). There are other risks, as the article at CFO.com suggests. In fact, they highlight liquidity and crime – both are key risks that you might be able to control with wise investments and careful planning. Maybe the addition of insurance or even just a better lock on your door.

Read the article here. Then, make your risk list. Then, figure out how to mitigate those risks.

The truth is, most businesses will click away after this blog and think “that’s not a bad idea, maybe I should do that someday”… but it’s the businesses that actually do it that will survive the next catastrophe.

Jessica Routier, IAC-EZ