In today’s world, never have so many businesses faced risk in trying to stay alive. If trying to make a profit is not hard enough, there are issues such as the recession, COVID-19, social media (which might be better described as anti-social media), climate change etc. and the list goes on.
No longer can people in business be overly optimist about anything. However, at the same time, no businessperson can become bogged down and do nothing. A level of optimism is always required when in business, otherwise you should not be in business. Today however, optimism needs be tempered with a degree of caution, unless you have the cash on hand to cover unexpected risks as they occur.
We hear and see constantly in the media these days; diversity is the key to survival and growth. For instance, we see that diversity in the sex and ethnicity of people within management and throughout your workplace is the key.
We rarely see however where diversity of thought is required in the risk assessments of sales, accounts payable and receivable, and in customer service. It appears any divergent thoughts to those of management in these areas is akin to disloyalty or mischief making.
The fact is however, it is in these very areas that the diversity in risk management thinking can add value to the business. For instance, it is no good selling to slow payers which may not be in business in two months, or fraudsters. Selling to businesses which constantly raise issues after the sales has been completed and they have possession of your product or used your services, is another bad option.
Other areas of concern to risk managers are:
- failing to understand the value of properly prepared sales agreements, or terms of trade;
- ensuring these agreements have been properly completed and signed;
- failing to understand the power of PPSR agreements;
- failing to understand the rules of debt collection, and the power of legal action,
- not knowing how to deal effectively with insolvency administrators, etc.
Today, risk management is a powerful process to protect your business, increase sales that will be paid for that increase profits. Risk management is not just a cost, it is part of the foundations of a strong business. Failing to understand the value of risk management usually comes down to management with yesterday’s attitudes. Therefore they rarely initiate processes and reports which show the benefits of a positive risk management ethos.
In summary, never have so many businesses faced risk in trying to stay alive. If trying to make a profit is not hard enough, there are issues such as the recession, COVID-19, social media (which might be better described as antis-social media), climate change etc. and the list goes on
The reality is that if “If you don’t manage risk, the risk manages you and dominates your actions until the problem is resolved!” Therefore, you can either spend time, which does not earn your business one dollar of profit by fixing mistakes or bad selling strategies, or actually doing business that results in a profit.
Want to know more, contact Kim at kim@creditmatters.com.au, or telephone (03) 9886 6707, A/H (03) 9802 0608, mobile 0411 649 261, or have a look at what we offer via our website at www.creditmatters.com.au
