1. RISK MANAGEMENT

2. RISK IS INEVITABLE  From your research of local businesses, what Risk was unavoidable and why?  Speculative Vs. Pure Risk  Speculative= Taking a chance for profit or loss  Pure = Threat of a loss to your business without any possibility of gain

3. PURE RISK - CRIME  Small businesses 35% more likely to be victims of crime  Shoplifting – Most common retail crime (13 BILLINON in losses per year)  How Prevented?  Training / Lighting / Mirrors and Cameras / Tags / Guards

4. PURE RISK - CRIME  Employee Theft– 15x more likely to steal than customers (20 BILLION in loss per year)  How Prevented?  Hire honest people – background checks & polygraphs / Information to Employees/ Locks / Watch Trash / Safeguard Keys  Burglary – Breaking into a building to commit a felony  How Prevented?  Site Selection / Locks / Alarms / Guards / Lighting

5. PURE RISK - CRIME  Robbery – Taking of property by force of threat  Stolen Credit Cards  Bad Checks  Counterfeit Money  Cyber Crime  Hackers or Viruses  Target / Home Depot / Us Postal

6. PURE RISK – OTHER TYPES  Fires / Floods / Tornados / Earthquakes / Hurricanes  Accidents and Injury  Negligence – Failure to exercise reasonable care

7. RISK MANAGEMENT STRATEGIES  Preventing or Reducing business loss 1. Identifies Risks 2. Estimating Potential Losses from Risks 3. Best Way to Address Risks  Avoidance / Reduction / Transfer / Retention

8. RISK MANAGEMENT STRATEGIES  Risk Avoidance  Making decisions to try and reduce the risk exposure of your business  Ex. Selecting a safe location  Risk Reduction  Business Floor plan Design / Training / Equipment Inspection and Repair / Product Safety Testing / Security

9. RISK MANAGEMENT STRATEGIES  Risk Transfer  Insurance!  Premium – The amount paid for insurance  Main 4 Types  Property / Casualty / Life / Workers’ Compensation

10. RISK MANAGEMENT STRATEGIES  Property - Fire or Flood  Casualty - Liability for an Accident or Protection Against Theft  Life - Protection Against the Death of an Owner  Workers’ Compensations – Required by the Government – Pay for Medical and Income Benefits to Employees Injured on the Job or due to Job Related Illnesses

11. RISK MANAGEMENT STRATEGIES  Risk Retention  When a Business cannot obtain insurance or cannot afford the policies  To offset the Risk, the owner may save money to cover the cost if the risk actually occurs