What is risk management and why do I need it?
Every business is prone to risk in everyday operations.
Risk is the chance of a loss occurring from some event. Self Storage owners are faced with a variety of risks including: damage to property, liability claims such as a slip/fall or employee injury, upset customers, or legal claims such as a wrongful sale. Risk is a normal part of your business and personal life, but risk can and should be managed in order to reduce the chance or severity of a loss. Risk management is not about red tape.
What is the purpose of risk management?
The purpose of risk management is to identify and deal with problems before they occur in order to avoid surprises and loss. Most large companies have professional risk management on-staff. The average self storage operator does not possess the scale to justify such a position. Therefore, the SSRMA is here to help you manage self storage risks.
Risk strategies can be handled in 4 ways:
- Avoid the risk
- Accept the risk
- Reduce the risk
- Transfer the risk
Typically the self storage operator is handling risk by either reducing the risk or transferring the risk. We will focus on these two remedies to risk management. This site will help you to develop a risk management program to enhance the success of your operations. All risk management solutions should include these processes:
1. Identify the risks
2. Assess the risk
3. Make a determination (plan) of how to handle the risk (reduce or transfer)
4. Implement the plan
5. Monitor the results
The most important step is identifying the risk. Risk cannot be handled if it is not identified. Most self storage operators think of their buildings when identifying risks. In self-storage, risk management not only applies to the buildings, but to the site (driveways, fences), all operations practices, hiring, security, financial controls, lease language, financing and economic conditions. This website contains a list of risks inherent in self storage and possible ways of handling the risk to suit your needs.