Being in business means taking risks regularly. But as a CEO, you may wonder how many risks are appropriate to take and what an acceptable risk level is. You want to see your company grow and thrive, but you don’t want to move forward so quickly that you set yourself up for failure.
A virtual CFO can work with you to help you assess risks and determine the best strategy and path forward for your company.
What Is a Risk Assessment?
A risk assessment is the process of analyzing risks or hazards and determining what impact they might have on your company. During a risk assessment, you identify specific risks and examine how they may cause harm and what that may look like. You also examine the benefits of the risks and compare the harm versus benefits to determine what to do next.
Why Perform a Risk Assessment?
Whether you’ve been in business for just a few months or many years, a risk assessment can protect your company from financial issues and aid you in business decision-making. A risk assessment can be particularly useful when planning your company’s next steps, such as when you’re weighing opening a new location or expanding your product offerings.
How a vCFO Will Help With a Risk Assessment
You don’t have to conduct a risk assessment on your own. In fact, working with a virtual CFO may be ideal, as the vCFO will be familiar with the process and will be able to provide you with outside insight and guidance. Your virtual CFO will examine risks in several areas, including financial risks, compliance risks and debt risk.
Based on what they discover, they can guide you to the next steps for your company. For example, if the vCFO uncovers a high level of debt, that may affect your company’s ability to obtain future financing.
Beyond examining the risks associated with your company’s finances, your vCFO can evaluate risks connected to your overall business operations, including supply chain risks, personnel risks and process risks.
Risk Assessment Steps
The steps to a risk assessment can vary based on the concerns your vCFO uncovers and your company’s overarching goals. What all types of risk assessments have in common is the first step: Identifying risks. You can work with your vCFO to list the risks that pose your business’s biggest threat or problem.
Next, you’ll work together to evaluate the harm a potential risk could cause, including who and what. From there, the vCFO can help you take precautions to monitor the risks and minimize their impact on your company.
Risk assessment is an ongoing process, as your concerns can evolve as your company grows and changes. The vCFOs at New Direction Capital will continue to work with you to help you manage and evaluate risks as they arise. To learn more about how it works, hire your virtual CFO today.