Top 10 Methods for Identifying Business Risks

 It's a cliché, but the risk is everywhere. If your answer is a businessman who wonder "What is your biggest risk," you can get 100 different answers from 100 different people. The worst answer is no answer at all, just a blank stare. The reason for the variance is the word "risk" may be used freely and in different ways too many problems to be defined are interchangeable in all sectors. Therefore, we go a little more about him the definition and limitation context of a business can. All managers can do is ask some simple questions that gradually begin to identify the greatest threats to the company. It was only after a definite risk, the 10 best ways to identify this risk will be helpful.
What is the risk?
In its simplest form is a risk, a chance for a loss, a loss of uncertainty, the possibility that different results, or the difference between something that happened compared to what is really expected.
What is the risk?
We can classify the risk in different ways, depending on the industry is the biggest danger for a company somewhere in these classifications:


Property - tangible or intangible
Human resources: employees, subcontractors, suppliers or vendors and other business relationships in general
Liability - liability risk may be too strict liability or negligence, tort, contract or statutory law, but the most prominent feature of a debt is a risk that can not be measured accurately before time.
Net Income - The net result is a number that is considered the variations of the baseline human capital, financial markets, government regulations or customer requirements.
Top 10 methods for the identification of risks:

    Checklists and surveys - Advantages: Checklists can be individually adapted and standardized, the need to implement minimal training, and information can be easily classified and tabulated. Weaknesses: checklists and surveys do not conform to the areas or operations, which have a limited financial impact and give priority to non-exposure. The bottom line is that the lists of great control and prevention of very specific risks (think of the accident investigation), but are not required in the scope in order to identify risks across the enterprise.

    Flowcharts - Advantages: Flowchart provides a graphical representation of the systems and processes to illustrate and interdependence within organizations. You can easily identify bottlenecks and determine the critical path. Weaknesses: flow charts do not indicate the frequency or severity, and are limited in terms of responsibility. Bottom line, flow charts are large enough to ensure quality control and effective management structures, but lacks the capacity or scope of the possible magnitude of a risk measure.

    Policy Review Insurance - Advantages: many insurance companies define risk hazards in the particular state, what is covered and not covered. Weaknesses: Insurance companies are in the wider area, and therefore absent from losing focus. Insurance companies are not standardized and can not be considered by the courts. The conclusion is that insurance, criticism is useful (covered and not covered) is to identify the risks, but only occurs after a loss.

    Physical checks - Benefits: Inspections are personally and to allow visualization of process data and places. While on site, an inspector may uncover unreported hazards and / or assets. Weaknesses: Inspections are time consuming and results may become obsolete due to changes in the situation or process. The end result is a physical inspection is often expensive, time consuming and be different and risk identification should be reserved for the highest frequency and severity of potential risks.

    Financial Statement Analysis - Benefits: Financial contributions may take the losses projected financial statements (ie, the quantization of gravity) to support specific events, and may reflect the effects of the loss of other areas of the company to demonstrate. Weakness: cold and impersonal analysis, no conclusions about the imminent dangers. The end result is a financial analysis is useful for theoretical modeling of the effects of the loss, but does nothing to control or stop the immediate threats.

    Compliance Review - Advantages: A compliance review will be conducted by an external authority or governmental laws, most of them free, and give an unbiased opinion of others in relation to a particular topic. Weaknesses: They have little or no control over the process of review and monitoring activities can be expensive and often require (OSHA). The end result is less than a certification or professional association, most organizations voluntarily choose a third party to verify compliance as a method of identifying risks.
    Contract Review - Advantages: contract review can cover a wide variety of materials, contracts and agreements, and may be "holes" in the documents to be identified. Weaknesses: A Critique of the contract often includes a second part to prevent, control, or changes in the treaty. The end result is the best time to review the contract before entering into the contract. There is much more leeway and flexibility in the language of the contract before it began.

    Policies and Procedures Review - Advantages: This entry usually contains internal documents such as bylaws, employee manuals, procedure manuals, safety manuals and risk management. The review may identify "holes" in the company's policies and recommended additions and deletions can quickly and without 2 or 3 Party commitment to implement. Weaknesses: "Domestic politics" may prevent effective treatment of the review process and / or recommended changes. The bottom line is if you increase the participation and support of all necessary parties, effective procedures can have an immediate and lasting impact on the risks identified.

    Lost History Review - Advantages: A quantitative analysis of historical losses can identify the loss of specific benchmarks in a variety of risks (property income, responsibility, human capital, net). The result of the revision to the loss of history, some specific indicators that can be used as a positive or negative indicator of progress. Weaknesses: The past is not always an indicator of future performance, especially if there was a significant change in operating activities (work, processes, people, leadership). The bottom line is always, as long as you have always put, you get what you always. With this knowledge, it is useful for specific performance metrics (loss of frequency, severity, net income, the maximum probable loss, the loss of the primary sources) should be used to evaluate the effectiveness of operational changes .

    Experts - Advantages: outsourcing of certain aspects of risk identification can be more time / cost and provide a measure of experience is not usually found within the organization. There are experts in a variety of areas such as finance, law, health and safety, risk management, weaknesses, etc: External experts can be expensive and hard to find niches for business or operations. The bottom line is, if an experience you need does not exist within an organization, or there is limited capacity for internal experts, after an outsourcing expert awaiting a fee for service can be very valuable and profitable.