Risk is the uncertainty of a specific outcome based on a set of circumstances. Some think that high risk relates to activities like base jumping, sky diving, mining or antenna climbers. Actually it is the uncertainty that creates high risk. You enter a contract to do a large job in another state. The job could go very well or could end up bankrupting the business.
In order to properly apply risk, you need to remove the insurance blinders and look at an Enterprise Wide Risk Management Program. It’s not for big companies, it can be easily applied to a small family business. It involves consistent application of your overall risk management objectives in all areas of your business.
The two main ways of managing your risk: