Every business should regularly apply a risk management process, but the fact is that most businesses don?t assess their risks often enough. As individuals we can and should apply that same risk management process in our own lives.
Since it?s the summer and a lot of us are coming close to a vacation, lets have a look at how the risk management process applies to a summer vacation.
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The first step is to assess the risks involved in the vacation. Risk might not be the first thing on your mind when you plan your vacation. It?s worth keeping in mind though, just in case. Let?s apply our own risk management process to one of the basic risks associated with a vacation, cash.
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The next step in the risk management process is to assess the risk to your cash. If you take cash on vacation and use it as your only financial source, there are a number of risks. There is the risk of loss or theft, both if you leave the money in the hotel and if you take it with you.
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The risk management process allows you to prepare for risk and mitigate or prevent them if possible. To mitigate the risk of theft or loss of your money, you could take only a small amount with you when you leave the hotel and keep the money in a hidden travel pouch. A hotel safe would also mitigate the risk of theft.
Mitigation of risk is only one facet of the planning section of the risk management process. The ideal option would be to prevent the risk entirely, in this case you can do that by putting your cash on a credit card and using that instead. As credit cards are insured and secure, they remove the risk that someone else could use your money. They are also replaceable.
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The last step on our risk management process is implementation. If we choose to prevent the risk and use a credit card, the implementation step is simply to apply for the card or add the cash to an existing card.
In Business, there is no last step in the risk management process. Risks are constantly changing and once you?ve implemented a procedure that needs to be assessed and the process starts again. But for our personal risk management process we?ll leave it at implantation. After all, it is supposed to be a vacation.
Every business should regularly apply a risk management process, but the fact is that most businesses don?t assess their risks often enough. As individuals we can and should apply that same risk management process in our own lives.
Since it?s the summer and a lot of us are coming close to a vacation, lets have a look at how the risk management process applies to a summer vacation.
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