Managing risks both involves and informs the business decision-making process. New risks will constantly arise as a business moves forward due to changing business, technology, and legal environments.
Many of these risks cannot be completely avoided. Indeed, Vested believes that attempting to avoid all risks is not a worthy endeavor. Doing so often leads to paralysis. Reasonable risks are often completely acceptable in view of associated opportunities. Properly managed risks often can be turned into new business opportunities. Therefore, a process for managing risks is essential to a business’ success.
Many effective processes have been created to manage risks. Different processes are better suited to different businesses and market spaces. All of these processes involve taking the following actions:
- Define business risks.
- Estimate the likelihood of a business risk resulting in negative consequences.
- Estimate the impact of those negative consequences.
- Define business decisions that can be made to attempt to mitigate the risk.
- Understand the costs and benefits of those business decisions.
- Decide whether to accept the risk or to attempt to mitigate the risk.
Effective and ongoing risk management is a competitive advantage for any business. This advantage is particularly powerful for small and mid-size technology based businesses.
We help our clients manage their business risks.
Solving problems. Managing risks. Creating wealth. Simply Vested.