Effective and profitable business risk management is a strategic and multi-layered process. Once you have the overview on mindset and outcomes, you will naturally incorporate this into your annual business decisions and forecasting.

The initial mindset is to understand your personal risk tolerance in present time, the near term, and the long term. This will guide you in your action steps for managing your business risk through changing times and business cycles.

Business Risks can be viewed and categorized on two axes: the first is the frequency of the occurrence of the risk (low, medium, or high frequency) and the second is the severity of the outcome of the risk (mild, medium, or severe.) Severe outcomes are expensive and damaging. These can be mitigated via our Create New Business Owner’s Capital Business Risk Management program.

In general, if you have some tolerance for risk, you would bear the risk of low severity outcomes and handle bad events on a “self insurance” or “pay as you go” basis. For risks which have medium rates of occurrence with moderate or low severity of outcome, you would likely transfer these risks to commercial insurers. For risks which have a low frequency of occurrence but a high level of severity of outcome, you would want to explore the features and benefits of our Business Risk Management ModelTM. In our model your business shifts its business risk to a private insurance company as the insurer of your business’ risks. The private insurance company then accomplishes legally required risk distribution with a participatory reinsurance entity. Depending upon claims outcomes during the insurance coverage year, unused insurance assets can be retained and recovered by you at a time of your selection.

The details of this risk management model are highly customized to your business, your risk tolerance, and your risk budgets. The high ROI that can be obtained in this risk management program may create a new favorite “Goals Capital” profit center within your business.