Building a successful fempire in today’s business landscape involves wearing many hats and juggling several balls. Yet, one of the most crucial hats you’ll wear is that of the risk manager. Think of risk management as the safety net beneath your high-flying trapeze act. Let’s dive into how you, the fierce fempreneur, can create a risk management plan to safeguard your business aspirations.
- Identify the Risk
Get your team around a table (or sit yourself down if you’re a solopreneur) and brainstorm all possible risks that could come your way. This is known as creating a risk register. From potential data breaches to misjudging your pricing strategy or even the nightmare of running out of financial resources – pen them all down!
Remember, this isn’t a once-off task; it’s an evolving process that spans the entire business lifecycle. A pro-tip? Two heads (or more) are better than one. Your team, friends, family, mentor or fellow Xenians might spot pitfalls you might have missed! Use it as a research opportunity.
- Dive Deep: Analyse the Risk
Once your list is ready, it’s time to play detective. For each risk, evaluate how likely it is to happen and the potential fallout if it does. Mark them as high, medium, or low probability. One way to do this is by using a Risk Analysis Matrix. Think of it as a game of Risky Business Bingo. It’s a sorting tool that identifies and captures the likelihood of project risks and evaluates the potential damage or interruption caused by risks.
- Horizontal Rows: How often something might happen (High, Medium, Low likelihood).
- Vertical Columns: What happens if it does (Major effect, Minor annoyance, Barely noticeable). By plotting each risk on this matrix, you get a visual of what to tackle first.
- Prioritise the Risk
Now that you’ve worked out your Risk Analysis Matrix, we’re going to have to add in a bit of maths by calculating our Risk Score. In short, a Risk Score is calculated by multiplying the Risk Impact Rating by Risk Probability (don’t worry, it sounds a lot more scary than it actually is).
You’re going to want to give each risk a number ranging from 0-10 for both the Risk Impact and Risk Probability. Let’s use it in the context of doing a closet cleanout.
• Risk Impact Rating (1-10): How much damage or interruption can it cause? For example, that favourite dress you can’t live without? That’s a 10. The scarf you wear probably once in a while? Maybe a 5.
• Risk Probability (1-10): How often is it likely to occur? Think of it like this – the likelihood of wearing your go-to dress? Probably a 10. But a neon hat? Perhaps just a 2.
Now use this simple formula:
Risk Score = Risk Impact Rating x Risk Probability
This will give you a score out of 100. For instance, if a risk has an impact rating of 8 (quite impactful) and a probability of 5 (could happen sometimes), its score would be 40.
By ranking each risk based on this score, you’ll know which closet item (or risk!) needs your immediate attention and which can wait a while. So, if you have a Risk Score of 80, girl, it’s time to tackle it head-on! But a score of 15? You can afford to breathe and strategise more.
- Assign a Plan and Owner for the Risk
Every risk needs an owner and a strategy. This is the person who will be taking responsibility, should a risk event occur. They’ll be your point person, armed with a plan, ready to tackle any curve balls thrown your way.
Of course, if you’re still a solopreneur, you’ll be heading this on your own. But the point is to HAVE A PLAN! For example, if that favourite dress we mentioned earlier gets ruined right before an event, perhaps you have a backup on hand. Or maybe a sewing kit? Or a go-to dress rental service?
- Respond to the Risk
Not all risks are created equal. Some might be hidden opportunities waiting to be harnessed. Once a risk is identified, ask yourself: Is this a silver lining in disguise? Can you turn this challenge into a strength? Remember, the best fempreneurs know how to capitalise on any given circumstance, whether it be good, bad, planned or sprung upon you.
- Monitor the Risk Ongoing
The key to risk management is keeping your eyes on the ball. It’s an ongoing dance of monitoring and identifying new risks. In the volatile world of business, you need to be ready to pivot at any moment.
And there you have it! By working your way through the above 6 steps, you’ll be a risk management pro in no time (AND your business will thank you for it!).
Ready to Empower Your Fempire?
Risk management is just one of the many realms of running a successful business. And while the journey of building your fempire might seem overwhelming at times, remember that you’re not alone!
Join our close-knit online community at Xena! With a tribe of over 25,000 fempreneurs ready to share, collaborate, and support, you’ll never feel lost on your She-EO journey. We’ve got your back every step of the way!