While a business plan outlines your strategy to take the agency forward, risk management strategies help safeguard you from potential pitfalls. You may think of it as a backup that can guide you during uncertain times in business.
Risk management strategies include identifying, quantifying, and managing of risks that a business can face. These risks include strategic, operational, and financial mistakes, including market disruptions, environmental disasters, and regulatory violations.
It may not be possible to remove all risks from your agency, but it is important that they are properly understood and managed, as part of the overall business strategy. Here are five powerful risk management strategies your agency should adopt:
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Use CRM technology effectively
One of the most powerful ways to manage risks is to adopt technology that can help you do so. Most risks in business are associated with human errors, lack of productivity and efficiency. Here is how client relationship management software (CRM) can help:
Cloud-based software minimizes risk
Cloud technology stores data on the internet instead of hard-drives, thus giving two benefits at once. It saves data from getting lost and minimizes the use of physical space to store hard-drives.
Accurate invoicing and commission tracking
CRM helps you create and customize invoices as per your agency needs. You can set system triggers for each stage of the invoicing cycle so that you will never miss where and when to send invoices.
Reduces human errors
The basic idea of a CRM software is to minimize human errors and maximize efficiency. With exceptional features like notifications, scheduling appointments, posting comments and client status updates, your agency will function optimally.
Decide how to handle each risk
Think of all the potential business risks your agency could face. Then prioritize them based on likelihood and impact. It could be a number of things – dissatisfied clients, failure to update visa changes, and so much more:
Make a list
Before getting into more details about risk management strategies, identify the potential risks you could face. Remember, every business is different, so don’t try to generalize these risks. Rather, look at everything that your agency does and how it could have potential risks.
Match the risks with their solutions
Once your list of potential risks is ready, get the team together and find ways to mitigate them. For instance, the failure to update visa changes on time can risk the recruitment of other potential clients. Find a solution that works well for your agency.
Assess solutions and retain the best ones
Sometimes finding solutions to your business risks will require experimentation. For instance, if some clients are unhappy, giving them what they want may seem like the obvious solution, but it must be weighed alongside other risks it could incur.
Monitoring and Review
Risks in business are not static and new ones may emerge and the existing risks can disappear. There are a number of ways to ensure effective monitoring and reviewing of your risk management strategy:
Take note of when anything needs to be checked and tick them off your list when they are completed. The timeline of your review will depend on the activity you are managing.
It is important to investigate and record any accidents or other incidents while developing risk management strategies. This will provide your agency with substantial information to justify your actions, but will also help avoid such incidents from happening again. Ask key questions – what went wrong, why, what could have prevented it, and so on.
To be truly effective, your agency needs to have good workplace communication, to deal with client complaints, suggestions from staff, and the general public. Everyone on your agency’s team should feel like a part of the risk management process.
Managing legal compliance and implications
Just like insurance, you need to be aware of any potential legal implications that may hinder the agency’s progress. Legal requirements are some of the basic obligations you must fulfill, regardless of the size of your business. There are three standard types of legal risk:
The range of events that can cause litigation is broad – employee misconduct, accidents, product liability, and so on. Schedule a meeting with your lawyer to figure out how to deal with these scenarios, should they occur in the near future.
One of the most difficult to track, this risk is associated with the breach of contracts by clients, vendors or other parties, and its implications. To minimize or avoid such happenings, many businesses focus on drafting effective agreements.
These risks are related to government rules and regulations regarding the education and migration industry. Regulatory authorities are granted powers to enforce these regulations by way of fines and administrative orders.
Separation from potentially harmful exposure
It is literally to “not put all your eggs in one basket”. If you isolate certain risks, the chance of a total loss is significantly reduced. Here are some examples:
Creating additional ways to backup your data helps you mitigate the risk. Even if your original files become corrupt or crash, the backup will restore them and revive the business.
The ability to access your client database anytime and from anywhere gives your agency great advantage over competitors. Not only does it create flexibility for employees, but helps continue work even during times of office repairs or unfortunate malfunctions.
Safeguarding office spaces
While remote access to files and backup help ease the risk of loss, one of the most overlooked ways to mitigate the risk is good management of office space. It is essential that space is safe from potential hazards, man-made as well as natural.
The word “management” has very powerful connotations, especially when it comes to assessing risks. Every risk in business has pitfalls as well as benefits associated with it. The way your agency opts to manage each risk can turn it into a great business opportunity if you do it right!