Reasons You Should Hire a Risk Management Consulting Company

September 18, 2019 | By Katie Abraham
Meeting with consultant

For businesses in the current climate, risks abound. Some stem from competition, others from natural market factors. Those risks may pertain to litigation, material sourcing, infrastructure, data security, corporate espionage, or market trends. However, regardless of the source of a specific risk, businesses must successfully navigate the minefield of potential negative outcomes to prosper and gain secure footing in the modern business environment.

Given the litany of risks to a company’s well-being, many businesses retain expert risk management consulting firms who perform the arduous and complex task of determining risks and developing strategies to minimize their effect. A risk management consulting company can help any business determine threats to profitability, determine their impact, prioritize those risks, and develop a plan to mitigate exposure. Keep reading to learn the reasons that you should hire a risk management consulting company to help your business navigate the complex risk environment.

Recognize Risks

The first step in defending your business is determining what factors may present themselves as risks, both currently and in the future. Some risks may be easy to forecast, while others remain far more elusive. For example, if you own a retail business, you have a known risk of liability regarding slip-and-fall accidents. That’s a given. However, you may not foresee that your inventory supply chain could be interrupted by economic factors that lead to the closure of a supplier. A consultant can help examine all areas of your business to determine what risks are obvious and which ones may be lurking just around the corner.

Assess Probability

Another common task performed by a risk management consultant is assigning probability to the previously identified risks. For example, slip-and-fall accidents in a public portion of your business will happen, so that probability is high. However, having a primary supplier close because of a fire caused by a lightning strike is a low-probability risk. It could happen, but the likelihood is so low that it may not warrant as much attention. Risk management consultants can help assess the likelihood of individual risks, which is a critical part of the planning process.

Updating project plan

Determine Impacts

Once risks are identified and their probability is determined, it’s easier to determine the impact of those events on your business. For example, the temporary loss of a supplier may have a major impact on your production if that company is your primary supply source. However, if you have diversified your supply chain to draw from several sources, the impact may be diminished. A consultant can help assess the extent that a risk can affect your business adversely.

Prioritize Risks

A risk management consultant will also help you prioritize the risks your business faces, which is critical in planning a strategy for risk mitigation. The greatest risks deserve your more urgent and dedicated attention. Lesser risks may demand a less aggressive plan for remediation if there’s any need to act at all.

Create a Plan of Action

The risk data assembled by a risk management consultant comes to fruition in the form of a strategy that your business can use to avoid risks or mitigate the impact of inevitable risks. The plan can include diversification of your supply chain, more robust liability insurance, bulked up cybersecurity measures, enhanced safety training for employees, and more. Your plan should include a prioritized list of risks, actions your company should take to mitigate risk, and the expected outcomes of your strategy.

Mitigate Risks

Finally, a risk management consultant can advise you regarding how to put the risk avoidance strategy into practice. A consultant can help you decide which actions are feasible based on the circumstances of your industry, market stature, employee base, and regulatory restrictions.

There’s no secret that your business faces risks to profitability from many sectors each day. By hiring a risk management consulting company, you can determine the risks confronting your business, assess their probability and impact, and develop a plan to mitigate them or avoid them altogether. To learn more about the reasons that you should hire a risk management consulting firm, contact The Carian Group at (908) 205-0450.