A traditional approach to business might be to avoid risk, at any cost. Risk is dangerous. However, the increasing volatility of a changing marketplace has made it pretty clear that risk is inevitable. Trying to avoid it can leave an entrepreneur in the same position as the proverbial ostrich. The question to ask isn’t so much “how can I avoid risk,” as “how can I make it work for me.”
Small and medium businesses are constantly evolving. There is a new breed of entrepreneur taking over the SMB world, and as an insurance broker, you must be prepared to offer the services these entrepreneurs need.
The new breed of entrepreneur
The new breed of entrepreneur embraces, manages, and harnesses risk. In its June 2011 study – Risk Management as a Source of Competitive Advantage and High Performance – Accenture reports that:
- 98 percent of participants value risk
- 83 percent will be investing more capital into risk management initiatives
- 91 percent view risk management as a “critical driver for growth"
- 93 percent recognize its value for “sustaining company profitability.”
A changing perception of risk
Compare that to a previous study, conducted by Accenture in 2009, where 85 percent of survey respondents had reported that risk management techniques failed to align themselves with their company’s business strategy.
The fundamental attitude shift, from 2009 to 2011, is striking. It points to a profound realignment in business strategies and perceptions over a period of just two years, and emphasizes the inherent value of sound and sustainable risk management practices for businesses of any size.
This brave new breed of successful entrepreneurs isn’t risk-shy. They aren’t looking for ways to avoid risk; rather, they are learning how to manage and harness it into a powerful growth-driven business dynamo.
Trying to avoid risk in business is the same as trying to avoid opportunity. Simply reacting to risk, meanwhile, is just crisis management: shutting the barn door after the horses are gone. Risk management is meant to be proactive; it promotes continuous and sustainable practices to reduce instances of peril, and capitalize on opportunities that wouldn’t even exist otherwise.
In a volatile economy, how a company manages risk is precisely what sets it apart from the competition. It’s not just a way of putting out a fire, but a way of preventing the fire from occurring altogether. Preventing the fire realizes decision-making efficiencies and nurtures sustainable growth. Risk management supports a more robust decision-making process, enabling business leaders to pursue new strategies and opportunities.
How brokers better serve SMBs through risk management
Entrepreneurs are looking to insurance brokers to prevent these fires. As a broker, SMB clients already see you as their risk advisor. Are you able to live up to this expectation? Only offering one type of risk management, the transfer of risk through insurance, is no longer enough for this market. You can remain competitive and better serve your client by moving from a conversation about insurance to a conversation about risk.
To learn more about how offering risk management services will better serve your clients, and provide you with a competitive advantage, watch our latest webinar: How Real Insurance Brokers Use Risk Management to Win & Retain Clients.
If you’re interested in learning how to make risk work for you and your client-base, reach out! The ClearRisk team can show you how to sell risk management services to your clients. We can help you turn companies into fine-tuned, risk-harnessing, business machines. Want more information? Learn more below.
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