After identifying the risks to your business, work out each item's level of risk and which need to be attended to urgently.
Analyse risks related to an event by considering:
- the damage the risk would cause
- the likelihood of the risk happening
For example if a competitor was moving onto the same street (risk), you may receive fewer customers (damage). Consider how similar the competitor's business is to yours, and how loyal your customers are (likelihood the damage will occur).
Work out a rating system for damage and likelihood. For example, you could have:
- ratings of 1 to 6 for damage (1 for slight damage, and 6 for severe damage)
- ratings of 1 to 6 for likelihood (1 for not likely, and 6 for extremely likely)
The formula: risk level = damage x likelihood, will help you work out the level of risk for each event.