Q. What else do I need to know about risk Management plans?

A. A risk management plan isolates your risks and helps you analyze and prepare for them. As I mentioned,
you’ll need to identify your risks first. First, try breaking your risks into categories:

Difficult to find qualified staff
High turnover in employee base
Possibility of employees stealing secrets
Vulnerability to other forms of theft

Health and safety:
Workplace hazards
Security concerns
Possible injury to customers or employees
Toxic fumes

Sales and marketing:
Saturated market
High cost of marketing and PR
Industry or other scandals

Food zone
Toxic landfills near site
Environmental risks o area of interest

Once your list is complete, look for details you ay have overlooked; many risks will be hidden, so you need to examine your
lists carefully; It’s also a good idea to review the last few years of business for reoccurring problems that you should plan
for in the future. If you’re starting a new business or initiative, research the experiences of similar businesses.

Another helpful strategy is to list the most significant tasks your employees perform. Beneath each item, record all the
associated risks you can think of. Don’t worry about overloading your list or being overly cautious you can make judgments about
what to address or eliminate later. As the saying goes, the devil is in the details: a crack in a levee, a bad product, a
small but malfunctioning machine part those injuries an employee.

Let’s focus on a seemingly simple example: an ice cream shop. The operation may seem straightforward: as long as the freezers
work and the customers come, the profits should be decent. In reality, though, the manager needs to consider a whole litany of
possible risks, including staff stealing equipment and/or money; potential turnover of staff; break-ins and robberies;
suppliers opting out of the deal; competition springing up; and so on.

You’ll notice that not all of these risks are equal- next, you need to prioritize. One of the ice cream shop owner’s threats
might be environmental: a flood, a storm, or other volatile weather could damage the facility, as well as present a good reason
for customers to stay home. However, the likelihood of this occurring in most places is relatively low unless the shop is
in a seaside tourist town that’s prone to hurricanes.

Now, determine how much the risk will cost in terms of dollars, time, and quality; then estimate the cost of preventing or
mitigating the threat and compare it to the cost of enduring it. You might find that preventative measures cost more than
actually addressing the problem, should it occur. If that’s the case, then the risk isn’t truly a risk it’s nuisance. The only
exception is human costs: take all steps necessary to protect your employees from injuries no matter what.

This is how the manager of our hypothetical ice cream shop might evaluate her risk:

Environmental damage. The manager knows she must purchase extra insurance. A few thousand dollars will cover most environmental
hazards-not bad compared to the potential cost of not having insurance.

Theft. This risk is likely but preventable- or at least something the manager can control. Remember, the ice cream shop can be
robbed, but so can the customers going to and from the parking lot. The cost of mitigating the risk equals the price of an
alarm system., floodlights, locks for the windows and other small experience.

Turnover of staff. Ice cream shop workers are usually high school and college kids hoping for extra cash to last through the
summer. Some may come and some may go, but workers will never be in short supply. The cost to stop this tide could mean a
compensation package, higher wages than those offered by equivalent shops, and other amenities that would be nice in a
professional venue but not at an ice cream shop.