7 Steps to Manage Business Risks by Nageshwar Shukla

India’s renowned business coach, Nageshwar Shukla, recommends focusing on these key areas to reduce your business risks:

1. Start by Prioritizing Risks

The first step in managing risk is figuring out which ones deserve your immediate attention. Not every risk is equal—some are almost guaranteed to happen, while others are unlikely. But here’s the trick: even if something is less likely, if it could cause massive financial damage, it should still be a top priority.

Create a simple scale like:

• Almost certain to happen
• Likely
• Possible
• Unlikely

Then, focus first on those that are both likely and costly.

2. Get the Right Insurance

Insurance is one of the easiest and most cost-effective ways to protect your business. Look at your liabilities and the laws that apply to your industry. Some common types of insurance to consider include:

• Life insurance
• Disability coverage
• Professional liability
• Insurance for completed work or services

It’s like paying a small fee now to avoid a potentially huge loss later.

3. Limit Your Personal Liability

If you’re operating as a sole proprietor, it might be time to think about switching to a structure like a corporation or an LLC. This change can protect your personal assets—like your house or savings—if your business ever faces legal trouble or debt.

4. Screen High-Risk Customers

Especially when you’re just starting out, it’s smart to avoid customers who might bring financial trouble. For instance, require upfront payments from those with poor credit history. This helps protect your cash flow and avoids chasing unpaid invoices later on.

5. Grow Carefully and Train Your Team

It’s great to set ambitious goals—but not if it pushes your team to take risky shortcuts. Instead, train your employees to focus on delivering quality rather than hitting aggressive sales targets.

Innovation is also key to growth, but don’t let your business rely only on new ideas. Not every new product or service will be a hit. Balance is essential.

6. Create a Quality Assurance Program

Your reputation is everything. High-quality products and great service build trust and long-term success. Test your products, ask for feedback, and keep refining what you offer. Even more importantly, take a look at how you test things—sometimes the process itself needs improvement.

7. Build a Risk Management Team

If your budget allows, consider hiring a professional risk management firm. But if not, build a team internally. Appoint team members who have experience or a good understanding of risk. This group can regularly assess threats and make sure you’re ready to act if something goes wrong.

Final Thoughts

At its core, risk management is like having a safety net for your business. It’s not about eliminating every threat—that’s impossible. It’s about being smart, prepared, and ready to bounce back.

Nageshwar Shukla puts it best: these seven steps are a starting point. The real key is understanding your business—your challenges, your industry, your goals—and building a strategy that fits. Because at the end of the day, the business you’ve worked so hard to build deserves protection.