Monthly Archive: February 2018

Business – 3 ways to mitigate risk

5 - Business - 3 ways to mitigate risk

Business risk is the term used to refer to the possibility of inadequate profits or even losses due to uncertainties or unforeseen events. These could include increased competition, change in government policy, obsolescence, among others.

It’s no secret that every type of business comes with its own set of risks. It would be naïve to assume that because you run a small business, you will not be exposed to the same types of risks as compared to much larger companies. The truth is, whether big or small, your business will be exposed to risk. What may differ is the severity.

Let’s take a look at 3 ways to mitigate risk in business.

The risk of business interruption

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Your business can be interrupted by various unforeseen events like fire, natural disaster, among others. This will result in massive loss of property, sometimes injuries and death, and loss of incomes for an extended period of time. As a mitigation against such a risk, as a business owner, it’s advisable to have in place a disaster recovery plan. Such a plan will entail data backup, an emergency alert plan for employees, and most importantly some form of business interruption insurance cover. Having such a plan in place will helpyou cover operating costs and loss of income as you engage in rebuilding. Ensure you are fully aware of what the terms of any insurance cover are before signing up.

The risk of property loss

22 - Business - 3 ways to mitigate risk
You may lose property in your business for various reasons such as theft, fire, and natural disasters, among others. It’s therefore important to have a mitigation plan in place for such an eventuality. This will start with an audit of your business environment both physical and processes, with the intention of identifying all vulnerabilities so that you can plan ahead. It will also be important to invest in some form of insurance that offers a cover against property loss that results from theft, fire, and natural disasters. Always make it a point to fully understand the terms of any available insurance cover before signing up.

The risk of injury at the workplace

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When running a business, you must always be aware that your staff or any other personnel in your business premise will be exposed to potential injuries which will result in certain costs such as medical treatment and even lost productivity. These are not expenses you want to pay from your cash flow because they may become very high. Therefore, to mitigate against them, it’s important to educate employees on issues of workplace safety, and also take up a workers’ compensation insurance cover. Such a cover will help provide benefits like wage replacement and cater for the medical costs of the staff memberinjured while on the job. It will also offer the business protection from any legal complications that may result from the workplace accidents.

Putting these measures in place will keep you protected from major losses that are likely to cause the total collapse of your business.

We invite you to share with us your experiences and success stories in your business adventure.

The 4 basic competencies for a successful business

4 - The 4 basic competencies for a successful business

For the success of any business, there are certain basic competencies that an entrepreneur must ensure are in place so that they can start and smoothly run their business. These are essentially competencies that will successfully aid the day to day operations of the business.

Here is the list of 4 competencies for a successful business. These are skills that an entrepreneur can choose to learn, or hire someone to provide them.

#1 Financial management competencies

For any business, the ability to manage finances is probably the most critical. You must always be able to budget, do cash flow forecasts and, monitor profit and loss. It’s also important to be familiar with your financial obligations to the government’s revenue authority and ensure all income is declared and relevant taxes paid. It’s only through having competencies in financial management that you will be able to ensure your business is profitable.

#2 Sales, marketing and customer service competencies

The goal of your business producing products or services is so that they can be utilized by your target consumers thereby enabling you to profit from this. In order for your consumers to be aware of the existence of your products or services, and learn about the value proposition of your products or services, you will need competencies in sales and marketing. This is essentially the team that helps you close sales and make profits. In addition to this, having a good customer service in place enables your business to be able to handle customer queries or complaints much more effectively thereby creating a sense of customer loyalty.

#3 Communication and negotiation competencies

For a business to be run successfully, you must have sufficient communication and negotiation competencies as these will come in handy when dealing with your various stakeholders. Being able to establish good relationships as well as make win-win deals with suppliers, customers, potential investors, as well as employees will be very necessary as part of the day to day operations and this requires the right combination of written and verbal communication skills.

#4 Leadership competencies

In your business, the overall leadership should come from you. Leadership competencies come in handy when you are making decisions on how to delegate responsibility, when you are managing a combination of staff, projects your business is engaged in, and other stakeholders crucial to your business as well as when offering general direction for your business. Your staff will rely on you for motivation and inspiration so that you can bring out the best out of them. It’s therefore important for you to hone your leadership skills so that you can be in a position to transfer them to your team.

These are competencies that every business owner should work on developing. Even, if you opt to outsource these competencies, you must make sure that you have an above average mastery of them.

We invite you to share with us your experiences and success stories in your business adventure.