New global handbook helps SMEs better manage risks

Wednesday, 24 February 2016 00:00 - - {{hitsCtrl.values.hits}}

Evidence reveals that only half of all small and medium-sized enterprises (SMEs) make it beyond their fifth year, suggesting that running a successful business requires managing risks effectively. Making a commitment to better understand and manage risk is therefore key to helping SMEs survive and grow sustainably.

A new handbook has just been published to help SMEs proactively prepare for risk and protect their business. ISO 31000 – Risk management – A practical guide for SMEs gives hands-on guidance on how to make the most of ISO 31000:2009, the International Standard on risk management processes, and integrate good practices in both their strategic decisions and their day-to-day operations.

Many SMEs do not engage in formal risk management

“Whilst most SMEs manage risk to a large extent, a number of SME leaders don’t consider implementing formal risk management processes, believing they aren’t big enough to warrant a proper risk management system or because they feel they are too busy running the company,” says John Lark, the author of the handbook.

“However,” he comments, “there is significant opportunity for SMEs that do engage in a more structured risk management practice. SMEs that do implement risk management in a way that is aligned with the principles and processes found in ISO 31000 can become more successful and be in a position to evolve into big companies.”

“Effective risk management is no longer something that only big business can have. This guide has been written for the leaders in small organisations, people whose commitment and energy have created the enterprise and who, by implementing risk management effectively, can help their business to survive and grow.”

Supporting the implementation of ISO 31000

ISO 31000:2009, by providing comprehensive principles and guidelines, can help all organisations put in place strong processes to identify opportunities and threats and effectively manage, leverage and adapt to risk.

ISO 31000 – Risk management – A practical guide for SMEs has been designed to complement this standard. It is structured as a checklist with a series of questions and related actions that guide users through the creation of a successful risk management system.

“The guide is a clear, simply worded explanation of how to implement risk management effectively,” explains Lark. “The question-and-answer format, as well as a comprehensive table of contents, allows readers to jump immediately to a subject or aspect of risk management that is of interest to them, or which is proving to be difficult.”

Published jointly by ISO, the ITC (International Trade Centre) and UNIDO (United Nations Industrial Development Organization), this handbook has been designed to help SMEs better understand and manage risk and ultimately strengthen their small businesses, which represent the vast majority of enterprises around the world.

Arancha González, Executive Director of ITC, Li Yong, Director General of UNIDO, and Acting ISO Secretary-General Kevin McKinley have indicated that they hope this guide will serve as a practical and beneficial resource for SMEs in their efforts to improve their competitiveness and increase their participation in international trade through better recognising and managing risk.