As a small business owner, you have a legal duty to keep your employees safe, along with any customers, contractors, or other members of the public who may visit your premises. Risk management is an essential process for understanding the risks you are facing, along with the steps you can take to address them.
What Is Risk Management?
Risk management is a process that involves taking the time to identify and assess every risk that your SME may be facing. Some of these risks will be the sort that any business of any size will have to contend with, such as fire hazards and workplace accidents. Other risks may be specific to your industry – a warehouse is a more hazardous workplace than an office, for example.
But SMEs may have to contend with some risks that may not be so much of a problem for larger businesses. For example, cybercrime. One study found that cybercriminals are three times more likely to target SMEs over larger businesses. Another suggested that around 96% of all cyberattacks target SMEs.
Risk Assessments For Small Businesses
Risk management starts with a thorough risk assessment. There are a few steps to go through here:
- Identify every risk that could lead to accidents, injuries, or other damages to your business.
- Determine who each risk may affect, along with the likelihood and severity of every risk you identify.
- Outline the steps you can take to manage, mitigate, or eliminate these risks.
- Establish who is responsible for carrying out each action you identify, along with a process for reviewing your risk assessment.
Essential Aspects of Risk Management For SMEs
Your risk assessment will help you identify the risks your SME is facing, along with the actions you might take to manage them. This might include:
- Staff Training – Every new member of staff should go through a thorough induction process to help them understand the various workplace risks, and how to manage them. You should also brief them on how to respond to emergency situations. Existing staff should receive refresher training at least once a year.
- Fire Safety – You should have a fire safety system in place, including alarms, sprinkler systems, fire fighting equipment, and emergency lighting and signage. You should also outline your fire response procedure. In the event of a fire, what steps should employees take? How should they evacuate the building, and who should they report to once they are safe?
- Onsite Security – As well as addressing the risks of fire, you should also address the risk of theft, vandalism, and other crimes. This can involve security features such as CCTV, roller shutters, and alarm systems, and anti-theft policies such as thorough stock-taking and anonymous reporting procedures.
- Employee Health and Safety – At least one member of staff should have first aid training, and every member of staff should know the process for reporting and recording incidents at work.
Cyber Risk Management For SMEs
As we mentioned above, SMEs may be at greater risk of cybercrime than larger businesses. Increasingly, IT and cybersecurity are becoming essential aspects of risk management for small businesses.
Cyber risk management starts with staff training. Every member of staff should be aware of the risks, along with the steps they should take if they ever encounter any suspicious activity. You should also take steps to secure your systems, paying particular attention to any employees who work remotely.
Read our full guide to cyber security for SMEs.
Get Tailored Insurance For Your SME
James Hallam is an independent Lloyd’s broker with access to a hand-picked selection of A-rated insurance providers. We can help you understand the unique risks your business is facing, and we can show you how to effectively manage these risks. We can then help you access the dedicated business insurance you need, at the best price.
Get in touch for a free quote today.