Steps to protect your livelihood
By Clinton Fraser

There are many sources of business risk. When operating your business it is important you understand there are certain risk events you can control and other events you can’t. Changes in government legalisation, adverse weather conditions, key employees, your health (blowing your knee when landing that floater) are examples of risk events outside your control.

Minimising Business Risk

Identifying and managing risk is an integral component of building a successful small business. It would be impossible to remove risk from all situations but you can take steps to remove or reduce your business risk. The process for minimising business risk starts with a risk register checklist as illustrated below.

1. Identify Risk
2. Grade the risk for likelihood
3. Grade the risk for severity / potential impact
4. Strategy to reduce / minimise / remove
5. Manage or retain the risk or transfer it

“To minimise business risk, small business owners need to implement effective risk management strategies into their business.”

This is a simple process of identifying what is a possible risk event, grading the event and then designing a strategy to minimise, manage or remove the risk, the latter being the most preferred.

Understanding business insurance is one way of reducing a number of business risk scenarios. When purchasing insurance make sure that you have appropriate cover in place to meet your current and future requirements.

Types of business insurance required by small business owners:

General   Risk and Life  
Business Disruption Buy/Sell
House, Vehicle and Income Protection
Personal Goods Key Person
Property Life
Public Liability Total and Permanent Disability
Work Cover Trauma

Scenario planning your business for potential future events, reducing their likelihood and ensuring you have go to strategies if they happen can be the difference between success and disaster. It is just the same as making sure you have that 7-foot pintail under the house for that once a year swell.


* Clinton Fraser is a keen surfer and accountant from Davidsons Business Advisors and Accountants. He has facilitated at SBIA roundtables. For a no obligation discussion please contact

Disclaimer: this information is of a general nature and should not be viewed as representing financialadvice. Users of this information are encouraged to seek further advice if they are unclear as to the meaning of anything contained in this article. Bstar and Davidsons accepts no responsibility for any loss suffered as a result of any party using or relying on this article. ©