Implement risk management plans, SMEs advised

BUUMBA CHIMBULU writes@SunZambian SMALL and Medium Enterprises (SMEs) can save money and protect their future by implementing a risk management plan and considering the various potential risks or events before they occurThis is because a robust risk management plan will help a company establish procedures to avoid potential threats, minimisetheir impact should they occur and cope with the results.This is according to the Institute of risk management Zambia (IRMZ), Executive Director, Francis Ziba.Mr Ziba said early recognition and mitigation of risk was a critical factor for success in all types of businesses, even more forsmall and medium enterprises including start-ups, as the cushion for absorbing failure is relatively low.“SMEs that used to operate smoothly with the help of forecasts and projections will now have to refrain from making businessjudgments that are cast in stone.“With Covid-19 firmly becoming the new normal in our midst, companies have a renewed focus: to manage risk!” he said in aninterview.Mr Ziba explained that if a company defined objectives without taking the risks into consideration, chances were that they wouldlose direction once any of these risks hit home.Risk, he said, was the main cause of uncertainty in any organization and has become inherent to every part of any business.He indicated that companies needed to take risk in order to grow, become profitable, and contribute to the economy.“Thus, companies increasingly focus more on identifying risks and managing them before they even affect the business.“The ability to manage risk will help companies act confidently on future business decisions. Their knowledge of risks they arefacing will give them various options on how to deal with potential problems,” Mr Ziba said.He said to ensure proper positioning and ongoing success, businesses and especially SMEs, would have to understand that riskwas universal, and needed to be managed in all business processes such as finance, procurement, sales and marketing,manufacturing, logistics. The Sun