Risk management ‘essential’ for small firms

Small businesses need to ensure that they have effective risk management strategies in place, it has been claimed.

Ian Fraser, spokesperson for the Institute of Risk Management (IRM), says that relying on the actions and team spirit of staff to ensure that risk is managed effectively ‘sounds like an excuse for inaction’.

He adds that there are a number of minimum strategies which the IRM recommends are in place, such as identifying possible alternative accommodation and organising communications and how they would access data in the event of an incident.

Small firms without such strategies ‘would be very unlikely to survive a major incident’, he remarks.

Fraser advises turning to advisory services such as Business Link, an insurance broker, a bank manager or a chamber of commerce for information on how to create a risk management strategy.

According to research by Experian Business Strategies and Harris Interactive, only 26 per cent of businesses in the UK have a risk management strategy and only 32 per cent are prepared for a loss of major suppliers.

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