The Importance of Enterprise Risk Management in Small Businesses
December 22nd, 2017 by ExigisAdmin
Starting a new company can be a risky maneuver. There’s risk everywhere you turn, and that doesn’t stop even once the business becomes established. There are several reasons why risk management is so important, even though it can seem complicated. That’s where enterprise risk management consulting companies come into play.
Risk in Your Market
Both big and small businesses can have market risk. Companies have to remain aware of changes in the market and how external factors, such as foreign exchange rates or international trade laws, can impact their business. This risk can be mitigated by identifying and monitoring these market influences and creating a plan of how to address them in the future.
Risk in Offering Credit
Another area where risk can occur for a business is with credit risk. There are times when your vendors or customers may default on paying the amount of money owed to a company. This situation can be a common occurrence, especially when the economic conditions are a challenge. This risk can be amplified by more than one individual defaulting on the amount owed to your company. There are some ways to mitigate this risk, such as buying insurance or using risk-based pricing.
Risks in Your Operations
The day to day business operations of your company is another area where uncertainty exists. Problems with failed processes, systems, staff, and external events all can have an impact on your company. Managing your operational risk comes from having healthy internal controls, review mechanisms, and well-defined roles that all can work together for an efficient operational process.
Risk in Reputation
Your brand’s reputation is an asset that’s hard to put a dollar sign on but is beyond valuable. Problems with reputation can result in customers jumping ship to your competitors. Monitoring your risk when it comes to the perception of your business is one way to manage this risk.
Tackle your expanding risk management needs through using enterprise risk management consulting firms. As your company grows, it can be overwhelming to handle all of the different tasks that come your way, and dropping the ball on your risk management can spell trouble. Enterprise risk management service providers like Exigis exist to help protect your company. Contact us today to learn how we can help.