Risk is as old as man and has been an old business acquaintance. However, there is no approach that makes risk extinct in the business environment; can be controlled to an appreciable level. As an entrepreneur, you have a duty to reduce your level of risk to the minimum possible if you can continue to make a profit. To this end, better risk management strategies are good inhibitors of business failures.

No matter what the sizes, companies must have a risk management approach as they can be easily managed when identified. To protect a business against risk, an entrepreneur must do the following:

1. Stop activities associated with risk: Activities that create risk for an organization must stop. For example, if you don’t separate a business fund from a personal fund, there will always be a temptation to use the business fund for personal expenses. Most of the time, quick and unilateral decisions by top members of management represent big risks for the company.

2. Spread the risk: Risk doesn’t have to be concentrated on your desk. Spreading the risks in the form of subcontracting some projects/services with a performance bond signed by the contracted company can help. Sometimes selling products on credit to trusted customers can help minimize the risk of obsolescence and the high cost of inventory.

3. Reduce risk through better management control: If the pros and cons of running an organization are properly explained to management staff, employees and customers, etc., certain risks in the business will be avoided. The correct management of company data also helps prevent risks. Printed data can be digitized and stored by accredited data administrators for security.

4. Insure against risks if possible: A business needs to insure itself against damage caused by fire and natural disasters.

5. Apply improved technology: if risks are avoided, modern techniques will be applied in the operation and provision of services of any company. This will improve business supply chain management and thus make service delivery excellent.

Managing some aspects of our business against risk requires automation. This will eliminate a large amount of human error associated with risks. In order to reduce risks in planning, monitoring and evaluation, IT tools will be a real instrument.