Risk Management for Small Business Is Possible — Take It One Risk at a Time

By: | October 25, 2019

Leanne J. Pemburn, ARM-E, CPCU is curious about all things related to risk management. She has been a licensed commercial lines insurance agent for 12 years, and works at Riggs, Counselman, Michaels and Downes in Towson, MD. The views expressed in this post are mine and do not necessarily reflect the views of RCM&D. She can be reached at [email protected]

Can a small business owner become a risk management expert?

Of course they can.

The secret is not to be intimidated by industry jargon and to set about getting educated on the topic like you would anything else; with a dose of humility and taking things step-by-step.


So for starters, what is risk management? These days, you’re probably seeing a lot of headlines and articles about risk management. Many are written for risk and insurance professional, packed with industry jargon and mysterious to the layperson who may be casually reading on their phone at lunch.

During my career as an insurance agent, the idea that risk is manageable, like any other process, has fascinated me.

In 2017, I completed the Associate Risk Manager designation through The Institutes Risk & Insurance Knowledge Group. During this course, I learned that risk can be categorized and compared to others with similar risk.

I learned that there are standards and benchmarks. We use a basic process of observing and classifying risks, then develop the means to deal with each of them. At the end of the cycle, your success or lack thereof is monitored and adjusted for improvement. While there are many risks in the wide world that we cannot avoid or eliminate, we can choose how we respond to those risks.

It sounds simple, like so many things before one examines them more closely. In practice, many of the articles suggest that full-on risk management is reserved for larger companies that have the staff and the budget to gather data and crunch numbers.

What about everyone else? Where do we start?

First, you should learn the basic concepts of risk management. There are classes available from several sources, including the Small Business Administration, community colleges and LinkedIn Learning.

Managing risk involves identifying what those risks are; determining which risks are important, or key; deciding how to deal with the risks; measuring performance over time; re-evaluating the methods chosen; and adjusting where necessary. Once the basic processes are understood, decisions can be made about how to address specific issues.

Managing risk in the modern world almost always involves data, made available in a way that business owners can use to make strategic decisions. That stack of paper receipts on your desk is data, although it’s not yet in a format that is going to help much.


“Big Data” refers to large and diverse collections of data on computers (or “data warehouses”) that can be compared and analyzed to help businesses make better decisions.

A lot of smaller data sets are already available, from your bank, from your insurer, from government — from federal down to the local level. Many smaller companies are not yet consciously taking advantage of Big Data: There are bridges that need to be built between accessible data and what it can be used to do.

To compile data for decision-making, there are software packages at many levels of complexity, to suit any budget. Search the internet for “small business risk management software” to start an avalanche of possibility! You will be in a better position to decide which software to use if you already have goals in mind about what you’d like to manage. Start with one risk and move on from there.

Take advantage of technology and data to help your small business thrive! &

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The R&I Editorial Team can be reached at [email protected]