A risk treatment plan groups your assessed risks by type or impact and sets out the next steps to remove or reduce their negative impact.
When you’ve completed your risk assessment, the next step is to create a treatment plan for your identified unacceptable risks. The risk treatment plan aims to increase the likelihood and impact of positive events and reduce or remove the impact of negative ones.
The Australian Government has developed a simple risk analysis template to help you identify the potential risks your business might face and how you can control or minimise these risks.
Your risk treatment plan should address the following points:
- What - the type and level of risk to be treated
- How - suggested strategies to treat each risk
- When - timeframes for each strategy
- Who - who's responsible for specific parts of the plan
- Requirements - resources required such as money, staff and external help
- Next steps - future action such as regular checking and updating of risks, if needed.
Share the risk
You can transfer or share some of your business risks, for example, by:
- buying insurance
- entering a partnership or cooperative
- outsourcing tasks, such as getting an IT consultant to manage your IT needs
Be aware that the risks may still have impacts on your business. For example, purchasing insurance requires ongoing payments and usually an excess. If an event occurs that requires you to claim on your insurance, it may take time to get back to business as usual.
Reduce the risk
- Reduce the chance of negative events or increase the chance of opportunities for your business
For example, your business stops paper filing due to workplace injuries. You have reduced the negative event of workplace injuries, and also created opportunities to save money on the cost of paper and printing, and enhanced your business’ profile as an environmentally conscious business.
- Reducing the size of expected losses or increasing the expected gains from opportunities
For example, planning for emergencies and unexpected events may mean you have the correct insurances, a communications strategy and processes that enable you to get back to business faster. You may be the first to be back in business and gain an advantage in the market.
Avoid the risk
If you can’t reduce a risk to an acceptable level, you may decide to avoid the activity that creates the risk.
But that may also mean missing out on opportunities for your business, so avoiding risks should be a last resort.
Check the risk regularly
Risks to your business are likely to change as your business, industry or customer base changes.
To allow for this, make sure your risk management plan includes steps to:
- regularly check for new risks
- regularly check your existing risks
- update the plan when needed
- update, inform and train your staff.