How to Create a Risk Management Plan for Your Small Business

When it comes to running a business, there may be a lot of dangers and risks. There are several measures to consider to ensure that these hazards do not harm an employee or a consumer. Creating a risk management strategy may help merchants ensure that they have all of the tools necessary to manage the company properly. Furthermore, retailers must provide a safe environment to prevent shoplifters and hackers from harming their customers and business. If you do not know how to start a risk management plan- here’s a step-by-step guide to help you get started on your game plan.

What is Risk Management?

Risk management is the process of projecting and evaluating fiscal risks and the implementation of protocols to prevent or diminish their impact. For small business owners, this entails taking precautions and taking steps to prevent accidents and manage risks, including theft, employee and customer injuries, and damaged inventory.

Create a Safe Workplace

Ensure that your facility is clean, neatly shelved, and has the proper signs throughout the store. If you don’t have these elements, customers may slip or fall in your store. When the floors are wet, for example, a customer or employee may slip or fall, and if your layout isn’t correctly laid out, this might result in an additional hazard. 

Make a list of issues that could arise

To create a risk management strategy, conduct research and explore the internet for information about company hazards, how to manage them, and how to avoid accidents. You can also use a network of fellow small business owners to learn how to implement risk management. Next, once you have gathered info about risk factors, create a document of what can happen in a workplace. Here are a few examples:

  • Customer and employee slips and falls
  • Theft – physical and digital (due to poor POS systems)
  • Website and credit card processor hacks 
  • Inventory Damage
  • Natural Disasters


Make a List of Ways to Prevent Those Issues

The issues listed above are foreseen risks. Using risk management, a small business owner can best be prepared to prevent them and minimize unfavorable outcomes. Here are some ways to prevent accidents, theft, and other risks.

  • If a customer and employee slip and falls
    • Major accidents, broken bones, and lawsuits are always possible, whether a customer spilling their water bottle or an employee losing their grip on glass inventory. As soon as water, glass, or other dangerous items hit the floor, be ready to place a safety cone or premade sign that states “Caution,” “Wet Floor,” “Avoid This Area”
  • Theft – physical and digital (due to poor POS systems)
    • Train employees on how to spot people that may be looking to steal items from your store. Look for people acting suspiciously and looking around to see if nobody is looking. 
    • Are you missing some money or have an excessive amount of merchandise missing? This could be shoplifting. To prevent this, make sure that you have the right POS system that is hard for robbers to steal money. Also, make sure that your POS keeps track of all the orders and knows what items are missing. 
    • Monitor staff to check on anything out of the ordinary in employee behavior. If an employee is acting suspiciously, pull them to the side and talk to them about what you have seen. If they were stealing or tampering with the POS system, you should report the employee. 
    • Ensure you have a solid POS system like those provided by National Retail Solutions (NRS). The POS system is a fast and secure system that will ensure you and your employees that nobody can steal your money through their state-of-the-art cash drawer with a safety lock. 
  • Website hacks and viruses
    • Thieves tapping into your credit card processing system and hacking your website to steal more than just money will compromise your customers’ sensitive personal data, such as their bank account information, leading to identity theft. If this happens, you’ll lose your soon-to-be ex-customers trust and business.
    • NRS POS systems offer a safe credit card processor because customer data is stored in a protected location. For online stores, be sure to have a solid anti-virus and malware program to prevent the risk of hackers getting into your site.
  • Inventory Damage
    • Unforeseen circumstances to inventory damage due to broken pipes or a fire can damage the fluidity of your business. Research insurance policies carefully to prevent critical losses of profit.
  • Natural Disasters
    • Investigate what kind of insurance you need against natural disasters. Whether it’s a hurricane or tornado that ruins your store, get the best insurance feasible. It could mean the difference between staying in business and figuratively going under.

Risks for small business owners can come at any time, so employing a risk management plan that properly manages foreseen risks drastically affects your business revenue. Be proactive and be prepared: Create a risk management plan to get started.