07 Nov Two places where you need risk management planning
If you started your small business with an inheritance, great news! Congratulations. But most likely you have a board of directors; initial investors whose focus is on the long term success of the company, on strategies for future growth and protection of their investment. Part of their concern will be threats and risks to the present business. Here are two final topics that you, and they should be focussing on when making strategic risk management plans.
Brand damage and reputational loss.
If your company is the victim of a cyberattack, you will need to inform any customer whose data may have been compromised. This will definitely not endear you to your clients. If word gets out, this can damage your ability to attract and convert new prospects into customers. This issue of brand damage could likely be the most severe, long-term risk to the success of the business. Adding to this is the competitive disadvantage it places you in. Competing firms may use an event like this to highlight their own improved ability to protect customer data.
It isn’t just you–Supply chains issues
One last area that you will need to advise your board about is your vulnerability to your supplier’s risks. Just as you can be attacked, so can every business and agent along the entire supply chain that feeds your business. As the pandemic has shown, supply chain issues can be serious and internal disruption. US vehicle production has been severely inhibited due to the unavailability of computer chips. If a major US automaker such as Ford can be hurt, what about a small business like yours? Every business should address the plans of its suppliers to handle a cyber attack and have plans in place for alternative sources of inventory.
In summary, it is important that you outline to your board their areas of vulnerability. Without this information, you, and they, cannot make strategic and tactical plans to protect the business in the case of a cyber attack.