Yes. Small business risk management is critical to establishing a business that will endure. I can’t emphasize this enough. Ask any small business or middle market business owner if he or she can afford to go out of business and lose income for any stretch of time. I’m sure that the overwhelming responses will be “no”.
Small business owners have spent years trying to establish their businesses. Many have invested their own money. And all rely on the success of that business to pay the bills at home. This is quite different from a Fortune 500 company.
Take Macy’s, for instance. Macy’s can take a hit to their revenue and not even feel the impact of losing that money. Look at Apple Inc. By the mid 1980’s, Apple was on the brink of bankruptcy. Today, Apple is ranked number five in the Fortune 500.
Despite the reality that owners take on a tremendous amount of risk, practicing small business risk management seems to not be a priority. What does small business risk management entail? It includes identifying, evaluating, measuring and managing risks. The average small business owner spends less than 3% of his time on the risk management process. That time is spent mostly on the insurance buying process. The typical buying process starts three months before an insurance renewal ends with policy delivery.
What Small Business Risk Management Questions Should You Ask Yourself?
Rather than focus solely on business insurance like BOP, general liability and property policies, the small business owner should be asking himself or herself:
- “How much revenue would I lose if there is a fire in the facility?”
- “Do I have a contingency plan in place if I can’t operate out of my current facility?”
- “If I lose my key employee, what are the impacts on my revenue?”
- “Do I have the proper safety protocol so my employees avoid injury? Do I have a return to work program if an employee is injured?
- “What is the biggest threat to my business?”
Fortune 500 companies have full time CROs (Chief Risk Officers) whose sole job is to identify, evaluate and manage risk. Small and middle market business owners unfortunately do not have this luxury. This makes it even more important that they work with insurance agents who are dedicated to helping them through this process. At The Murray Group, we make it our business to get to know your business.
At The Murray Group, we are not just insurance agents. We seek to be your trusted adviser and outsourced risk manager. We will take you through our trademarked risk management process, called LiveSECURE 365, and help you identify your areas of need.
We provide our partners will educational materials, share our risk control expertise and create customized insurance programs in an effort to reduce and mitigate risks within their businesses. Make sure your current agent is doing the same for you. You don’t want your livelihood to be affected by a business catastrophe. Call (518) 456-6688 to discuss this further, and any one of our team members will be able to assist.