Identify Potential Risks

The first helpful step in small business risk assessment is identifying potential risks that could affect your business. These can be categorized into several types:

Operational Risks: These arise from day-to-day business operations and can include equipment failures, supply chain disruptions, or employee errors.

Financial Risks: These involve monetary aspects such as cash flow problems, credit risks, or changes in market conditions.

Strategic Risks: These relate to the company’s overall business strategy and can include competitive pressures, changes in consumer preferences, or regulatory changes.

Compliance Risks: These are associated with adhering to laws and regulations, such as tax requirements, employment laws, or industry-specific regulations.

Reputational Risks: These involve potential damage to your business’s reputation, which can result from negative publicity, poor customer service, or product failures.

Take some time to review each of these risk categories and note which are relevant to your operations to get a picture of your risk level.