NumbrLabs

Accept, Mitigate, Transfer, Avoid

Risk is everywhere – from crossing the road to paper cuts. The job isn’t to eliminate it (that creates new costs and constraints); it’s to understand it and manage it.

Take credit insurance. It’s often slapped on by default, but insurance is risk transfer, not risk understanding. If your key customers are Tesco and Sainsbury’s, what exactly is the policy doing? What risk is it priced against, and is that the best use of cash?

The point: context matters. Look at each risk through two lenses – impact and likelihood – then choose your stance:

• Accept (we live with it at this size)
• Mitigate (reduce it with limits, process, controls)
• Transfer (insure, secure, or stage payments)
• Avoid (we don’t do this deal/behaviour)

Don’t leave it to chance—plan it and write it down. Give each risk a simple trigger and an owner. When X happens, we do Y.

Do you have clear strategies for:

• Disaster / outage
• Loss of a major client
• Loss of a major supplier
• Loss of key employees
• Loss of reputation
• Loss of funding

You don’t need a binder—just a one-page view of what we face, how big it is, and what we’ll do.