To develop a map and reduce risks, SME managers will need to implement five major steps.
Identify and assess inherent risks.
Analyze internal and external threats to your business. Evaluate each risk along two dimensions : the probability of occurrence and potential impact (financier, legal, operational, reputational, etc.).
Identify existing control systems.
Review the means already in place to reduce or prevent the identified risks. This includes internal controls, the procedures, technological tools, etc.
Prioritize residual risks. Once existing systems have been taken into account, assess residual risks. Classify them into two categories : risks requiring immediate action ; accepted risks, but must be subject to regular monitoring.
Develop an action plan.
For each risk deemed critical, define corrective actions, designate those responsible, set deadlines and identify monitoring indicators.
Regularly update the map.
Risk mapping is not a fixed document. It must be updated regularly to take into account changes in the environment., activities and regulations.
Once the risks have been identified and assessed, four possibilities.
EXAMPLES OF RISKS
Governance and human resources : death of a manager or key person, disability, disagreement between partners, flaws in accounting, management, the legal, contracts…Fires, vols, damage to premises or equipment. Information systems : software update, deletion or loss of data, server crash, hardware or software failure, backups, cyberattacks. Climate change : scarcity of raw materials, drought, flood, earthquake. Clients : significant percentage of turnover concentrated on a small number of customers. Customer sustainability. Percentage of new customers… Business process. Providers : solidity, sustainability, renewal. Lois, regulations and standards : constraints, liberalization of the market or, conversely, restricted access to the production of certain goods or the exercise of certain professions. Concurrence, commercial contracts. Crisis : denigration, denunciation, sabotage, damage to reputation, market collapse.
