Understanding the risk profile of your company is so much more than simply documenting the risks that can have an organisation-wide impact. The key aspect in getting your risk profile up to strength is by fully understanding, adequately managing and then mitigating any risks. This can include having appropriate insurance in place, looking into cash flow solutions such as invoice discounting for commercial businesses, but it also ranges to ensuring your employees are fully trained and can immediately spot and deal with potential pitfalls.
Risk Profile Fingerprint
Each risk profile is unique to the specific organisation. The market segment, people, outside influences and strategy should all be taken into account to assess the possible hazards and put in place a risk profile. Analysing all these different issues will enable you to draw up a profile fingerprint as to how and why various risks could occur to your business.
Factors to take into account
When assessing the strength of your risk profile you should always ensure that you do the following:
- Make sure you manage all risks in the same way – a little investment in staff training will ensure uniformity across the board
- The default position in relation to risks is that they should be transparent unless there is a key reason why they would have limited exposure – this would apply to situations such as employee fraud. The reason why you should be open with your risk profiling is that it becomes much easier to engage your employees in the process
- Remember that risk is a constantly evolving process and nothing stands still – the environment and the influencing factors change, as does your company
Insurance that should be in place as part of a strong risk profile
The following types of insurance can be essential elements of a strong risk profile:
- Public liability – essential to cover the welfare of your clients and the general public, in addition to the consequences of any damage caused to any third party or property by any product or service you provide
- Professional indemnity – essential to cover your company against any claim made by a client alleging that you were negligent in the advice or services provided
- Employers’ liability – essential to cover all duties of health and safety towards employees
- Business interruption – essential to cover any damage to your business caused by fire, flood or any other covered loss or damage which interrupts your business
Invoice discounting and factoring are specific invoice finance solutions which give you an element of security against any invoices you have issued. Securing payment from your clients once you have issued your invoices can be problematic and can cause cash flow problems which in turn can restrict the expansion of your company. It’s vital that you take this into account as part of your risk profile.