Small business risk management

The financial news is replete with talk of risk society and risk reduction. The Board of Directors of listed companies is blown in the cartoons for newspapers, social media and TV evening news for does not risk management. And then there is the Government, or more properly the bureaucrats in the rooms of the Republic are legislating on all business risk management. The sad side of this is that legislators do not include the simple definition and the concept of risk.

If we take a short stage in the history of trade we find that current science of risk management is a relatively new concept. The definition of the 16th century of risk aims – to seek prosperity. It is interesting to note that historically risk management did not materialize in the context used today until around the years 1960 and is now a component of financial management in the 1980s. Certainly, the idea of risk has been around for the transportation industry for centuries, leading to the design of insurance companies. But in terms of General Affairs, risk management is relatively new.

So – before all academics began to develop formulas, enterprises and write books have been trained to develop software that companies and boards of directors could find their way to manage risk? The answer is a stretch of the imagination in the 21st century. It is difficult to identify, losing its context in philosophical approaches such as modernism and the emergence of software and computation models. Provided this tool of commercial practices which were before the advent of business intelligence and dashboards?

These ancient tools are: common sense, good value client and personal integrity. All these apply to all aspects of the business risk assessment and mitigation there. Most frequently used of these ancient tools has always been common sense.

Common sense is just attention clearly and with the experience and knowledge; good decision with his judgment. There are a few problems with this simplicity that common sense is not more common. Many companies, especially corporations, start with minimum experience and knowledge in areas key leadership, financial management, organizational and marketing.

There are some key indicators of good sense that companies require general attention. They will be raising awareness on obviousness.

Simple and quick financial indicators

cash flows from o - I know that there are those who will argue this point. The trend to look at the health of the company has been EBITDA (earnings before interest, taxes and amortization). Although it's an indicator of good business, there nothing that defines health better than cash flow business.
o accounts receivable - how much is outstanding, by whom and how long?
o cost of goods sold (COGS) - simple point to this complex indicator is that, if you know not all costs associated with your product or service, then you cannot understand your margins which means that you have cash flow problems. Also consider employee performance as regards efficiency in the output of your product or service as a component of CMV. I know that many companies see this flag in their accounts but step always have included appropriate components accurately and therefore don't miss this indicator says.
o expenses - details from your other expenses that COGS. Where does the money go? This does not mean that you necessarily count each paper clip, but it is interesting to note what spending unnecessary impact on cash flow.

Simple and fast external indicators

o the client satisfaction - what you're really heard of customers on the product or service?
o competition and market - what do you really know their subject? What do you have reviewed your SWOT (strengths, weaknesses, opportunities and threats) analysis regularly?
o access to capital - what is happening with your Bank and your relationship there? How you finance ideas and what happens in the capital market environment?

Essence of the company is filled with risk. What is used for the road to the family livelihood use barter exchange rates turned into profit-oriented entrepreneurial spirit and returns for investors. All companies must assess what is happening, understand the risks in their business, so that they can take appropriate decisions to improve their business operations and revenues. Taking the time to look under the covers of key internal and external indicators, management can evaluate details and build a larger image then applied its judgment in decisions. This is what the risk management is simply about. If the undertaking is complex and costs are justified with a solid return on investment analysis then good software tools are useful. The most important aspects of risk management are: knowledge – know your business. experience - trust your experience and that of your Advisory Council or Board of Directors, and finally, make sound judgments. Be a researcher in this business tool elusive old school - common sense.

Tom Niewulis, Jr. has a passion for small business. He worked with small businesses to develop management teams in implementing decisive organizational strategic vision with a good judgment and initiative to lead and develop teams of the organizations. As a member of the National Association of Directors of corporations, Tom provides insights business about leadership, risk management and corporate governance as they grow into market and efficiency opportunities. It shares the inner workings of the company from years of experience in trenches and knowledge with lightness.

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