Minimising risk should be a priority for all businesses, particularly in today’s uncertain and unpredictable economy. There are many forms of risks, including financial, safety and operational, which can be managed using various approaches.
Here are six ways to protect your business from risk.
1. Know your numbers
At Bluepath, we know that understanding your numbers is an essential part of business success. When you know your numbers, all other aspects of your business can align. Here are four tips to help you interpret your numbers:
- Know your cash flow. What money is coming in, and what money is going out?
- Use a recognised accounting software like Xero for financial insights.
- Understand exactly how much you profit from each product or service.
- Work with business and finance experts who can help grow your business.
2. Consolidate internal processes
Your internal processes are inextricably linked to your overall business efficiency. With clearly defined standard operating procedures and contingency plans in place, your business is well equipped to manage problems when they arise. This reduces the risk of sudden or unexpected events affecting your business. The most topical example of this is the COVID-19 pandemic.
Managing internal operations and processes can be challenging or confusing, particularly during business growth periods. If you need help navigating this, contact the Bluepath team.
3. Diversify your products and services
Diversifying your products and services is a great way to increase income streams and offer more value to your customers. Not only can this give you an edge over your competitors, but it can also help to maintain public interest and showcase your versatility as a business.
Here are four ways to diversify your business:
- Start selling online.
- Go overseas.
- Add a product or service.
- Generate recurring revenue with a subscription service.
In 2020, we saw businesses find new and creative ways to adapt and diversify. The pandemic forced businesses to change how they delivered their service from restaurants adding takeaway services to education centres shifting to online learning. Did your business diversify during 2020? Will you be continuing these new practices in the future?
4. Document everything significant
Do you keep clear, organised and accurate records? Do you have a system for documenting important transactions like sales, tax payments and contracts? If not, your business could be at risk of unintentionally committing fraud or theft. To reduce risk, keep important documents safely filed and invest in tracking your finances and activity.
5. Invest in people
Your employees are your most important asset. Investing in quality staff, training, and management will significantly benefit your business. Businesses who neglect the HR aspect of their company cannot experience optimal success and often experience more stress.
When your employees have clear goals and feel supported in the workplace, they perform well. When they dislike their role and feel trapped, these feelings impact their performance and interactions with other staff members. Navigating HR and managing people can be challenging- get in touch if you need assistance.
6. Work with a quality finance and operations team
Are you managing your finances by yourself? Would an outsourced finance expert help to reduce stress and improve financial management? You are a business owner, not a finance expert! While you do your best to manage risk and boost profitability, there is only so much you can do on your own. The team at Bluepath can help you to manage all aspects of finance and operations.
Need help with risk management or looking to outsource financial and operations services?
At Bluepath, we offer various financial services including bookkeeping, HR, payroll, operations management and consulting. For comprehensive management and assistance from an experienced team, contact us today.