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Effective Risk Management for Small Business

Risk is defined by the UK’s Audit Commission as “any threat or event that adversely affects an organisation’s ability to achieve its objectives or successfully implement its strategies”.

As a small business owner you might think your risks are easily understood and so simple or unlikely that you don’t need to write them down, far less draw up an actual plan to manage them. That could be a big mistake.

Consider this: you have an idea how you’d cope and it sounds good in your head, but in your heart you know you haven’t fully thought it through. Suddenly a crisis hits out of left field and there you are responding on the fly. It can add up to major unnecessary stress, lost business and maybe even an expensive claim on your business insurance and increased premiums afterwards. Do yourself a favour and draw up some decent business continuity plans. Your business (and your blood pressure) will thank you for it.

Four simple steps to effective risk management

1. Identify risks – with a focus on business objectives

2. Assess risks according to potential impact and likelihood

3. Decide on actions, prioritising those risks with highest impact that are most likely to occur

4. Draw up business continuity plans and review annually

Although many risks could disrupt your business, the good news is that you don’t need an individual plan for each one and every possible permutation. If you tried to do that, the task would soon become overwhelming. It’s generally more practical to build a set of flexible, holistic business continuity plans.

A good business continuity plan is based on a “business impact assessment” or BIA and you’ll find a number of templates on the web. A BIA helps you think through potential disruption in a number of scenarios and decide how to keep your business up and running. If and when a crisis occurs reaction time is sped up because the thinking is done and you know what to do and who to call.

How to plan

Here’s an example. Rather than trying to think of every possible reason why your premises might one day be inaccessible, simply plan for what happens if you can’t get into the office/factory. Plan for several time periods, from 24 hours, to 3 days, a week and a month. Do you see how this is more flexible?

Spend a bit of time thinking through the implications in detail. If you have staff, get them involved in generating solutions because someone is bound to have a helpful suggestion. Then practice the plan. It’s worth doing this because it typically reveals a glitch that you can then iron out.

Scenario planning

This style of BIA and subsequent plan can be adapted for widely diverse risks that could impact your business. Here are some scenarios you might want to plan for and some of the questions you could ask:

  • Holiday periods. Do you close down for certain holidays? What extra risks does this expose your business to? Key factors could include the value of goods and equipment left unattended plus replacement costs. Location might also be a factor depending on whether you’re in a high-traffic zone or a quiet business park.
  • You are incommunicado. Never mind why – who’s going to run your business and where are you going to store the plans and guidance they’ll need?
  • Power and IT problems. Do you have an off-site back-up or alternative workplace organised? Who are the key personnel?
  • What happens if half your staff are suddenly unavailable? Again, for the purposes of planning it doesn’t matter why. How could you keep going with less people? What gets prioritised and what could wait? Are temporary staff an option? Would they need training?
  • Supply chain failure. Increasingly complex supply chains increase the potential for problems, resulting in unhappy customers. How are you going to work around supply chain failure if it happens?

To make sure you’ve covered all the bases, think about investing in some expert advice. This doesn’t have to mean hiring a consultant; your fire department, local police and even your accountant may all have some useful insights to contribute.

Are You Making This Mistake in Your Direct Sales Jewelry Business?

Whether you are looking to get started or have just started your home jewelry business, a common mistake that is made by many. Sure you are excited about your potential business or your new home jewelry business and you want to share it with others. And you should, however the approach is what will make it or break it with your family and friends. Your excitement may not be shared by all in your family or circle of friends. Now most of us feel that we may have a supportive family or circle of friends and many do. But to what extent?

Are you making this Mistake in your Direct Sales Jewelry Business?

Often I hear from many before starting a direct sales jewelry business, “I want to show my friends and family the catalog to see what they think before I get started.” Often times it’s done after you have started your new jewelry business as the first approach to making a sale or booking a party. This act is a huge mistake and can cause discouragement for the new direct sales jewelry business owner or the one who is thinking of starting a business and is relying on the reaction of friends and family in order to make their decision.

So imagine that you just started your new direct sales jewelry business and are taking your jewelry catalog around and showing it to friends and family to see what they think. What are you really saying to your family and friends?

Here is what you are unknowingly doing and saying to your friends and family. Suppose you take that catalog and roll it up and point it at each of your friends and family members that you approach, and say to them “Give me your wallet!”

Would you hand over your wallet? Is their response going to be a positive one? You are performing a “stick up.” Each person that you approach in this manner is thinking, that you want their money and you will not receive a positive reaction at all. You will be met with many excuses from friends and family with this approach. Excuses can include, “I can’t afford it.” “I don’t like jewelry.” I don’t like the style of the jewelry.” Etc. This certainly is not the approach that will get your family and friends to respond in a positive way, now is it? This causes discouragement for you, and your friends and family may start avoiding you. Perhaps you never start your new home jewelry business or you quit before you really get started all because you did a “stick up” on your friends and family. How would you feel at the receiving end of a stick up?

Creating Value in your Direct Sales Jewelry Business is a Must

It is not about starting your direct sales jewelry business or that the jewelry is not appealing to them. It is the fact that you are asking for their wallet before you have created any value or desire in the product or service in which you are offering to them. Key word “them.” This is not about you. It is about them. How can you create value? What can your new direct sales jewelry business do for them? What can your jewelry product do for them? Will it enhance their beauty? Make them feel more put together, fashionable and more confident? Will your parties offer not only free and discounted jewelry but an experience to be remembered? The experience and emotion is where the value is at. The emotion creates the desire. The better the experience and the stronger the emotion – the more value and desire that you create with each individual.

If you love the product your friends and family will too. Your excitement will only feed this. You do not need to stick them up with a catalog asking for their wallet. Learn to create the value and you will see more positive results.