Even small or medium-sized businesses need to be aware of business risks.

Your staff and clients all need to minimise all losses, so you can make a success of the business.

A robust business risk assessment and plan can preempt any issues that may occur down the line and avoid potential threats.

Your business needs to plan for as many potential business risks as possible.

There are five key business risks to look out for:

Security and fraud risk

These include data breaches, cyber-attacks, embezzlement, money laundering, identity theft, and intellectual property theft.

Internal processes need to be strong, especially in the light of remote work. It is essential to ensure that you encode all laptops and phones to protect business and clients’ information.

Cyber-attacks that steal client details can cause massive damage. The new POPI act in South Africa can hold you liable for any issues down the line if there is a breach in their personal information.

Credit card details and other personal details are critical to protecting with the right software across all devices and storage facilities.

When you hire staff, it is also important to do credit and criminal checks, especially if they are working with data, money, or client information.

Compliance risk

Laws and regulations can change regularly. It is up to you as the business to stay up to date with the rules and apply them where necessary.

There are laws relating to occupational health and safety, equipment certifications, and taxes. Your team must avoid these changes, as ignorance is not a valid defense.

Depending on your business, your industry regulations may change as well. To stay ahead of the curve, you should assess all potential changes each year.

Operational risk

It can be an internal or external risk or even a combination. Operational risks can include natural disasters, like the recent KZN flooding, a global pandemic that relies on staff working from home, or even a technical disruption, like a server crashing for days on end.

Implement a continuity plan for various issues that can arise so you do not get caught off-guard.

Financial or economic risk

As investors and shareholders scrutinize financial and business profits, they are critical to keeping them in check. Financial risks can be caused by global issues, like the Russia and Ukraine Wars, foreign currency fluctuations, commodity price changes, or exchange rates.

Financial planning and hedging are essential to get right to keep profits high.

Reputational risk

Poor customer service, defaulting products, and support can create negative publicity for your business. All reputational risks will affect your business profits and customer relationships.

Failure to address business risk can cause more issues. Fraud or security breaches that affect clients due to negligence on the part of your business will damage your business reputation in the long term.

To protect your company from any of the above risks, you must do a risk assessment every year to isolate potential issues and implement mitigation plans.

Bizcash offers companies finance solutions that can help you grow your team, train staff, and enter into new markets?

Please speak to our team to find out more about how we can help you. Get in touch with us on 0861 93 93 93 or email us on info@bizcashscf.co.za or contact us here.

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