As I write this, election day is only hours away. I would tell you to remember to get out and vote, but, by the time you read this, you most likely have already checked that box (or, more accurately, colored in that circle). Stats are showing nearly half of those who voted in 2020 have already voted early.
If you’re nervous about what could happen tomorrow, that’s understandable – you’re not just voting as an individual, but also as a business owner. And because you’ve got more at stake, the outcome hits you harder.
Election chaos can be distracting. But, for the sake of your Miami Metropolitan business, it’s important for you to keep your mind on the things that you can impact. Care for your employees, lead your team with strength, and figure out how to provide the best service and products to your customer base.
There are a few other financial housekeeping things you could take care of to keep your business well-primed post-election:
- Consider building up your cash reserves in case of any economic friction
- Check that your financial strategies are sound
- If you can, hold off on major investments until the new year
- Get your 2025 budget finalized (note my recent writing on this topic)
Preparedness truly is the key here, as we’re on the brink of legislative and economic shifts. Foresight is what’s going to help you stay steady.
And the reality is… Foreseeing risks should be an ongoing activity for you as a business owner, whether or not a new president is about to step into office.
That can be a heavy burden on you because you want to see your business thrive. And you also don’t want to feel the regret of taking a chance that backfires.
But I want to encourage you that, with a viable plan in place, you can competently steer your business away from taking losses because of risk. And I want to equip you today to do just that.
ERM Strategies & Managing Risk for Your Southeastern FL Business
“The biggest risk a person can take is to do nothing.” –Robert T. Kiyosaki
The images of the recent hurricane season have been a strong wake-up call. The unexpected can hit anyone at any time. And I don’t need to tell you that owning a business comes with plenty of its own storms that happen inside your four walls.
So you already know this: you can’t avoid risk. But you can implement strategies to manage it with the help of Enterprise Risk Management (ERM) – the way to name, assess, and take on the risks that could threaten what you’ve built.
What’s the benefit here? Well, you don’t have to be afraid of what could go wrong – you can actually make decisions with confidence because you have systems in place that can handle even worst-case scenarios. And more than that, you’re ready to minimize the fallout if the unexpected does happen.
(Important note: This doesn’t guarantee that all consequences of a worst-case scenario are preventable or fully manageable—aka: it helps minimize impact rather than eliminate all risks.)
Of course, ERM isn’t a one-size-fits-all. It’s tailored to your industry, your comfort with risk, and other factors. But there are a few universal ERM bases every business owner needs to cover:
Set clear objectives: Before you start breaking down specifics, you need to establish a framework for what overall level of risk you’re willing to carry (while keeping your overall business objectives in mind).
For instance, if your vision leans toward aggressive growth, you might embrace more risk. But if you’re focused on slow, steady returns, dialing it down might make more sense.
Outlining your goals helps you to know whether risks are worth taking by showing you how they contribute to (or take away from) your bigger vision.
Identify and assess risks: Think broadly here. Possible areas of risk to consider are…
- Financial (debt management, financial planning, and market changes).
- Operational. How could risks that impact your day-to-day functions hamper your business’s ability to deliver?
- Quality – anything that could affect the processes that ensure standards are met.
- Security (Cybersecurity is a big one here – and small businesses are especially vulnerable).
- External risks like natural disasters or inflation.
Assess these possibilities by two factors: Impact and likelihood. This will help you prioritize what to tackle first and how to go about building a treatment plan.
Quick tip — AI is your friend here. AI can use predictive analytics to help identify potential risks you may not think of, and can use data to assess them efficiently (saving you and your team the effort). *BUT… implement the use of these tools carefully to avoid data privacy risks.
Create risk treatment plans: You’ve got a few options here: Mitigate it, avoid it, transfer it, or accept it. Which method you choose depends on your risk appetite and the nature of the threat.
Using a natural disaster as an (unfortunately relevant) example, you might develop a mitigation plan by designating a crisis management team, creating a tier of business function priorities, and developing strategies for recovering from financial losses.
Or you could mitigate cyber threats by promoting awareness within your business and starting a cybersecurity training program for your team.
Another common example is purchasing insurance policies to protect you from financial losses (think property damage, liability claims, or business interruption) as a means of transference.
It’s a heavy load – having to carry the weight of “what ifs.” I want to see you empowered to weather any (literal or figurative) storm in your Southeastern FL business by putting systems in place to fall back on when things go sideways. Truthfully, ERM is less about disaster prepping and more about confidence boosting.
And if you need any confidence-boosting specifically about any nagging financial concerns, my door is open:
calendly.com/ralfheyer/30-minute-meeting
To what we can control,
Ralf Heyer