Legal And Risk
When it comes to risks, the best organisations are extremely proactive. They identify potential hazards and major risks – and create strategies that help them to avoid them. This allows them to focus instead on innovating, creativity, and how they can best grow their businesses.
What Risks Does Your Business Face?
There are four major categories of risks worth considering:
- Strategic risk, such as a new competitor in your market
- Compliance risk, such as new safety or health regulations
- Financial risk, such as unpaid customer accounts or a rise in business loan interest rates
- Operational risk, such as equipment failure or theft
How to Create a Risk Management Process
Risk management is a central tenet of any good organisation’s strategy. You need to be able to identify and address risk in order to have the best chance of meeting business objectives.
Risk management plans consist of:
- A methodical assessment of risks concerning your business
- Determining how likely these risks are of affecting your business
- Creating a risk management policy to respond to potential risks
- Establishing systems to address potential consequences of these risks
- Monitoring how effective your risk management plan is and refining it as-needed
How does risk management benefit your business?
Risk management processes help your organisation to:
- Improve processes including planning, decision-making, and setting priorities
- Efficiently allocate both resources and capital
- Accurately anticipate what could potentially go wrong, what fires you may need to put out, and disasters that could harm your business or lead to major financial losses
- Makes it much more likely that your business plan will be delivered on time and on budget.
This process becomes far more important when your business is launching new products, emerging into new markets, or trying other new things.
Why a Legal Strategy is Essential To Business Success
How to make sure that you have put an optimal legal strategy into place to support you and your senior team.
- Why is it important to use the best legal advisors?
- How to manage legal advisors
There are four key types of legal strategy:
- Transformation – Transformative legal strategy is both highly complex and often a great way to increase profits. In transformation, your corporate legal strategy becomes part of your overall business model.
- Compliance – In compliance, your business follows legal guidelines and mandatory requirements that allow them to operate. Many companies who let compliance drive their strategy fail to use the law to their advantage – or have a clear understanding of how to use the law to improve profits.
- Prevention – Preventative legal strategy demonstrates a clear understanding and proactive use of the law. Companies that use preventative strategies know how to take advantage of the law, using it to both reduce risks and grow their business where possible.
- Avoidance – Many companies, consciously or unconsciously, choose not to pay attention to local laws when making crucial business decisions. This can often lead to significant consequences much later on in a business’s life.
What makes legal strategy so valuable?
Good legal counsel can be invaluable to the growth of a business. By advising on issues such as business costs, tax payments, and strategic decisions, they can help organisations avoid setbacks in the future while getting an advantage over competitors in the marketplace.
The Essential Guide to Scale Up Challenges
Learn about how to overcome the challenges when scaling up your business
Other strategic challenges you may be facing:
❖ Internal Systems – ensure that your business can run efficiently and effectively with clear systems. Taking control of your internal processes ensures that company culture is maintained and employees are never left uncertain how to proceed without you.
❖ Outsourcing and Supplier Management – it often makes sense not to do everything in house. Your business can’t always cover every possible area of its operations, so making use of outsourcing and external suppliers can help. Strategising your outsourcing will make sure you maximise value and efficiency.
❖ Corporate Governance – implementing a strong corporate governance structure means setting rules for your key business leaders. This helps build trust in your business, as well as guiding culture, maintaining engagement and providing accountability.