Any small business runs the risk of failing through any number of reasons. Whether it is mismanagement or changing market conditions, lack of capital or poor business decisions, the corporate world is a minefield for those just stepping out.
Yet it’s not only small operations which can run into trouble out on the business battlefield. Even the most well run company operating in favourable economic times will face dangers and risks that can prove costly and sometimes have catastrophic consequences on their success.
The general idea of ‘risk’ is something that everybody who runs their own business is familiar with but depending on the specific area of operations these threats can differ greatly.
Traditional threats that a business might face may concern business premises or stock and associated problems caused by fire, theft, weather incidents or criminal damage. Today, however, there are also far more complex threats which are increasingly facing SMEs and larger businesses. These are known as ‘intangible risks’ and are often concerned with data handling or other cyber systems.
Intangible risks revolve around issues that might have negative effects and are more difficult to define than many traditional dangers. Interruptions to business activities caused by a problem with a supply chain, reputational damage caused by adverse publicity or a wide range of data-handling difficulties might all fall under the term’s definitions.
With changes in the laws governing data security coming into effect in EU under The Data Protection Directive, penalties and fines for an SME which falls foul of the regulations look likely to be very heavy indeed.
Not all business risks come from outside sources though. According to a recent survey by Avecto, it is their own employees who pose the greatest risk to some companies.
The study involved more than 500 decision-making information security professionals and aimed to discover the major risks to their businesses. The results showed that 80% regarded rogue employees, malware exploits or unauthorised software as the top three concerns.
Assessing risks allows positive proactive and preventative measures to be put in place. Threats from inside a business don’t have to mean disgruntled employees acting with malicious intent. If administrative privileges go unmanaged or bad practice is in place, there will be an increased vulnerability to a range of potential problems.
The use of unauthorised applications can lead to malware problems and also software licensing and compliance issues. Lax security can lead to unintentional loss or damage to data.
Although some of the most challenging risks still only affect top levels companies operating large data mining operations, it is inevitable that SMEs will face increasing regulation of the way they control personal data as more activities move online. This trickle-down effect means that it is more important than ever for new and smaller businesses to address modern threats and risks from the outset.
Whilst geopolitical changes might pose a threat to the operations of multinationals, SMEs must be more concerned with localised economic issues and any regulatory or market risks associated with them. Online resources such as Business Insider, The Economist and the Lloyds news section can be a great help in keeping up with all the latest developments and you’ll find plenty of advice and information to make use of.
Changes, such as those introduced via the Data Protection Directive, might seem far removed from daily business activity but will become increasingly important as digital data forms an ever more important core to every area of commerce.