Article by: Jannie Rossouw
The idea to develop of a series of articles on the topic of Risk Management stemmed from my experience as a business advisor working with business owners of small to well matured and vested medium sized businesses where risk management practices are focused on addressing legislative risk requirements. Examples include the Protection of Personal Information Act (POPIA), Occupational Health and Safety (OHS) Act, Labour Relations Act (LRA) and the Companies Act.
The identification and management of generic business risks are either left until the “unexpected” happens or is seen as a theoretical exercise not worthy to address diligently.
This cannot be further removed from the truth. You only have to do a little research on the internet to see story upon story of reported business failures due to financial challenges, slowed down economic activity, reduced tourism in certain areas of the country, the impact of power outages (over the longer term) and the subsequent lack of back-up power due to the high cost of installation. An interesting observation is that many of the failed businesses are in the hospitality industry (guest houses, restaurants), food franchises, coffee shops and small-scale manufacturers.
The reality is that business owners can pre-emp business risks, determine the risk rating and plan remedial or pro-active actions to manage the identified risks.
The focus of this brief article is to give mention to the 10 most common risks facing South African SME`s.
Here is the researched list:
1. Cash Flow Management
2. Load Shedding and Energy Security
3. Access to Finance
4. Regulatory and Compliance Challenges
5. Crime and Security Risks
6. Market Competition
7. Skills Shortages
8. Cybersecurity Threats
9. Labor Relations and Strikes
10. Political and Economic Instability
The international perspective differs to our list. There is only a 40% overlap. The reality is that our business risks are more closely associated to those of a developing economy. We need to be mindful of this and see it for what it is.
A prudent approach is to start the Risk Management discussion in the business.
Be on the lookout for the next article where I will share one key question to ask in each of the 10 business risk areas above.
I trust that this journey on the topic of Risk Management will enrich your thinking and empower you to actively identify, plan for and manage the risks which your business and industry face.
Contact Jannie Rossouw from Bright Future Consulting to fast track your business risk management practices.
Tel: 082 560 4149
E-mail: jannie@brightfuture.co.za
Website: www.brightfuture.co.za
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