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What is a business risk register and should you have one?

The last time you had a register taken may be a few years ago however a business risk register is vital in considering your risks, planned actions and mitigation should the worst happen. Each business needs to decide what the individual risks are, this senior meeting is often tabled and then postponed for immediate operational concerns.

Many businesses from start up to scale up are well-managed by the founder and directors and any consideration for risk usually centres around cashflow, profit & clients. However, what if the worst were to happen in your business? The greatest risks are usually people falling ill, if the MD or a key member of the Exec Team was unable to work for a period how would the company manage during that time? You may have insurance to cover salary etc however, do the team know how and indeed who would make the decisions and keep the business afloat? All business risks can be tabled in this format.

Key considerations to format in a business risk register.

  • Risk description
  • Impact description
  • Impact level, 1 (low) – 5 (high) – create a score
  • Probability impact, 1 (low) – 5 (high) – create a score
  • Priority level, multiply impact and probability scores
  • Mitigation
  • Owner

The mitigation is a key column and can be as detailed as required by each business, usual components include decision makers and budgetary controls.

These situations can be very troubling when issues arise that have no mitigation planned, this was certainly the case for a client recently. The business was 2nd generation family owned, the MD managed the business well and very successfully however at 51 he had a heart attack, and the business was left suspended for many weeks from making the right decisions. Thankfully, he was able to come back to work, it did however take 2 years for him to return to full time. He now leads the business very differently to his management style previously and whilst he still enjoys taking risks – he mitigates the risk very successfully.