RISK MANAGEMENT PLANNING

Examples of businesses who fail to predict and plan for risk:

1. A professional service firm missed the renewal of a critical membership, which meant that it was no longer able to submit transactions to its key suppliers. The issue was sorted out, but in the 7 days this took it lost a number of clients. Estimated revenue lost was $130K.
2. A manufacturing firm where the maintenance program for a high volume production machine was allowed to slide, with required maintenance not completed on time or by the required service staff. A subsequent breakdown was disallowed under the manufacturer’s warranty – causing both delays for its repair as well as having the cost for the repair rest with the business. The replacement part came from Germany, the specialist repair engineer from interstate and 12 days of lost production – total cost $380K.
3. A wholesaler did not run the “normal” induction program for some new employees because “they were busy”. Unfortunately this meant that the new employees were not aware of the warehouse processes used by the company, resulting in a serious injury to one of the employees when they got too close to some loose stock. Direct medical costs were approx $90K, with legal action still pending for a 6 digit claim for pain & suffering and permanent injury.

A risk mitigation plan could have prevented these incidents.

Furthermore, with a strong foundation in place, business owners have the ability to focus on growth and success.