Risk is intrinsic to living, and certainly part of doing business. Your approach to risk depends on your risk profile.
Risks are events or circumstances which could have a negative effect on your business. The negative effect could include an employee getting injured, the business losing money or your reputation being damaged. Risk increases when an event isn't planned for or happens differently from what you expected e.g. a downturn in the market or a flood ruining your stock.
What is risk management?
Risk management simply means to identify, assess and manage risks. By collecting information about potential risks you can make informed decisions. By making risk management an active part of your business, and dealing with risks before and as they occur, you can minimise losses.
Some risk management is required by legislation – for example, food safety legislation and Occupational Health Safety & Welfare legislation.
Visit Health SA – Food Safety for more.
Common hazards and risks include:
- manual handling
- colliding with mobile machinery, animals or boxes
- cuts from knives
- muscular stress caused by lifting, pushing and pulling
- muscular stress through repetitive work
- slips, trips and falls
- fire and emergency
- drugs and alcohol in the workplace
- violence in the workplace
- hazardous substances
- injury reporting and management
- workplace noise
Minimising unnecessary risk
It is sensible to omit unnecessary risks as far as possible. Techniques include:
- documenting business processes
- inducting new staff, and training staff in new processes and the safe use of equipment
- maintaining high safety standards and very strict food safety standards
- ensuring equipment is well guarded to avoid personal injury, with Standard Operating Procedures in place and clearly visible
- maintaining equipment, servicing regularly, and promptly repairing any damage or defect
- maintaining a neat and orderly work environment
- fitting out the work environment with safety equipment such as fire extinguishers and blankets, eye rinses and first aid kits
- ensuring at least one staff member is trained to administer first aid
- maintaining good stock control
- banking cash regularly
- securing premises adequately
- backing up computer systems, preferably offsite
Whatever your risk profile, it is sensible to minimise avoidable risks. Insurance is an obvious mechanism for containing business risk. But even comprehensive insurance cannot compensate you for the full cost of a major incident.
If your workshop or retail premises burns down, you may be able to clear the debris and rebuild if you are insured. You may even be covered for loss of profits. But the missed opportunities for growth, the disruption to your life and your business plans, the extra paperwork – insurance will not cover these costs, which may be even more significant.
Similarly, product liability insurance may cover you for a food quality breakdown, but the loss of reputation may destroy your product and your brand and put you out of business.
Want to know more?
Reduce your risk
Community organisations in South Australia have a responsibility to provide a healthy, safe and risk-free environment for their staff, members, volunteers and the communities they serve.