The Importance of Risk Management
Over the years, the field of risk management has evolved to become one of the most important, if not the most important aspect of building a solid strategy.
It is an interdisciplinary field covering many different aspects and views on what the risk for the subject could be. With times, the nature of the risk changes, so the type of risk that was relevant ten years ago is likely not going to be as relevant today.
Because of that, it is extremely important to stay on top of the latest developments in your industry, as well as in the world in general so that you can more precisely assess the nature of the risk you're exposed to.
Most common risk types today
The main type of risk these days concerns technology, especially the IT sector. Digitalization and cybersecurity also rank pretty high up there too, and as the technology becomes more and more advanced, technology risk becomes more and more pronounced in any serious planning.
With the number of transactions being made online, the importance of websites in everyday business, and even in the functioning of governments (US elections have allegedly been under attack in 2016), it's easy to see why technology and the Internet take center stage in risk management.
And if you're planning to start an online business, you will appreciate the risk you and your company are exposed to all that more. You WILL want to have someone to help you alleviate that risk as much as possible.
However, apart from the technology risk, legal risk is also right up there. More precisely, regulatory changes.
You see, due to the fact that the legal jargon and the legal system are so convoluted, it's easy for someone to include a proposition in an agreement or a contract that you know nothing about. And if you're not careful, you could end up paying for something you never even knew was in the deal.
PPI claims are a perfect example of that – some banks will try to sell you insurance you don't really need or are simply not eligible for it. Fortunately, however, there are legal firms that specialize in cases like that and help their clients get compensated for being taken advantage of. You can see how this can be important for your financial well-being.
So, risk management has evolved over the years to become this versatile interdisciplinary field absolutely vital for planning any strategy, especially a business strategy.
The main risks can be divided into technology risks and those of legal nature, both of which can severely impact your ability to do business smoothly.
That's why it's important to have a competent risk analyst/manager by your side from the start – they will show you what problems you can expect and help you come up with the right strategy for them. Don't overlook them when setting up your business.