How to create a Risk Management Plan

Before you can create a Risk Management Plan to protect your business, the all-important first step is to pose the question "What could possibly go wrong at my organisation?" The more thorough you are in answering this question - the more thought you apply to considering the unpredictable - the better prepared you will be in a time of crisis.

It is important to consider the small AND big picture. For example, a small start-up company may be hyper-conscious of cash flow issues and compliance with labour legislation, but have given little thought to how currency fluctuations and competition in a globalised marketplace may affect them.

Organisations of all sizes can be hurt by everything from staff resignations and power outages to something as easy to overlook as creative stagnation - the failure to innovate. These circumstances can all prevent a company from achieving its performance and profit objectives.

It is therefore vital to devote time and money to the creation of a Risk Management Plan and Business Impact Analysis. You could call on the services of a professional Risk Management advisor or, using a little common sense and an online template (many are available), you can start the process yourself.

Along with asking "What if?" it helps to brainstorm with other decision-makers at your organisation. Draw in managers from other departments (e.g. Accounts) as they will have exposure to different issues that you may have overlooked.

Once you've identified all the risks, the next step is to determine their probability of occurrence and possible consequences. With these risks outlined - along with their possible scale of impact - it is finally possible to create a plan of action to avoid, reduce or transfer the risk elsewhere, depending on what is most cost-effective and beneficial for the organisation.

Risk Management plans can be applied to an organisation as a whole, or when specific projects are being considered. In both cases, they are equally beneficial. Having conducted a Risk Management assessment you may even decide not to embark on a project.

The Business School at Varsity College offers tuition support for working adults who want to develop their Risk Management skills quickly and with maximum convenience. Certified by the University of the Free State Business School, the Enterprise Risk Management programme teaches participants how to successfully, systematically and strategically handle risk. Upon completion of the practical programme, they can return to their organisation and apply the programme teachings using the versatile template-driven approach they've been exposed to.

The 5-week focused programme is ideal for working adults - particularly anyone who fills a planning or management role at their company. Classes take place once a week outside of working hours, giving participants the opportunity to bolster their CVs while continuing to work full-time and earn a salary.