There can be so many distractions for the entrepreneur and small business owner everyday that, quite often, the big picture can be lost. Your big picture, both your entrepreneurial vision as well as your risk management strategies, can become clouded as you strive to focus on your company’s day to day operations.

Managing your risk on a day to day basis is vital to the success, and longevity, of your business. Each day, the entrepreneur and small business owner must continue to evaluate the potential risks ahead as well as evaluating those risks and putting together a plan to lessen or eliminate their potential impact on your business. After this has been done, a proper evaluation needs to happen so that plans and actions can be assessed for their effectiveness.

Understanding the characteristics and true nature of the risks you face on a daily basis can be just as important. When you have identified certain risks, are you understanding how severe these might be if they happen? How much damage could a particular risk inflict? How often may such a risk tend to appear? What about a costs/benefits scenario? Here is where you and your risk management advisor can really formulate an outline and a plan that will keep you in the game no matter what might present itself.

Transferring some of your major risks will certainly be an alternative that you and your risk management advisor can plan for. When doing this, however, it is important to, not only understand insurance industry cycles, but keep in mind many risks you may not have thought about.

Such as:

• Workplace injuries and illnesses as well as unforeseen car accidents.
• Global economic downturns, terrorism, or wars.
• Natural disasters such as earthquakes, hurricanes, snow storms, or wildfires.
• Political and environmental climates of your region as well as government regulations and directives.
• Death or disability.
• Asset or property theft as well as your service or product becoming obsolete.

These are just some of the major factors having a considerable impact on you and your business. When establishing a risk management plan there are so many factors that will affect these risks as well as you and your livelihood. Understanding the true nature of your business, as well as its vulnerabilities, is the first step toward preventing disaster.