The statistics are rather harsh and gloomy. According to the Small Business Administration, only 4 out of every 10 business ventures survive longer than four years. These stats are just for start ups. What about small businesses with employees? The numbers are more frightening. There are as many small businesses going under every year as there are start ups making an attempt to survive.

Most small businesses, research has shown, don’t survive because they were afflicted by certain events that were not foreseen. The lesson to be learned from these rather gruesome stats is that many more small businesses and entrepreneurs can survive if they would just pay more attention to their risk management strategies. If, of course, they even have any.

Risk is, quite simply, the appearance of something you, as a business owner, would rather not see make an appearance. Exposing yourself and your business to risk is the riskiest business step you may ever take. Risk management will continue to be a key to your survival and success. Not that good at understanding risk? That’s fine. That is when your professional risk advisor can step in and help you formulate a plan specifically for you.

There is, of course, opportunity hidden within every perceived risk. You are an entrepreneur. Risk is inherent in your nature. You do not fear risk but neither are you reckless. The trick is isolating the opportunity from the risk. It is in that window that your risk management plan can help you seize the opportunity while isolating the risk. All of the legendary entrepreneurs took great risks but they managed and understood those risks so that the opportunities were allowed to surface and to flourish.

You, as an entrepreneur or small business owner can, for the most part, break your risk down into four basic categories:

• Those risks that are rather minor and will not cause any lasting damage. These, for the most part, can be ignored.
• Risks that can, with proper risk management policies in place, be avoided with some simple changes in the behavior of you or your employees.
• Some risks you face are major but the risk can be transferred to a third party such as an insurance company.
• The final, and most serious threat to your risk management strategies, are those that will pose an imminent threat to your demise and will likely occur at some time forcing you to constantly audit them.

When devising your overall risk management strategy, it is best for you and your risk management advisor, or team, to break down your identifiable risk into these categories. This will make all of your risk easier to identify and to manage.