Risk is one of those concepts we understandably tend to avoid, yet it is impossible to entirely remove risk from business and life. But not addressing risk can lead to a potential personal or business crisis.
In macro terms, risk is present in areas such as inflation, the overall direction of the domestic and world economies, interest rates, unemployment, the health of the companies in which you may invest, government policy and of course, geo-political risk.
From a business perspective, things to consider include the stability of your relationships with partners and key employees. Are sales on track? How is the competitive landscape changing? Does your business model need to be upgraded? Is a business-succession plan in place? Is your technology and internet security up to date? Are you vulnerable to supply-chain risks?
There is also personal risk. Are your family and key personal relationships stable? How is your health and that of your spouse? Are your retirement and estate plans on track? Do you have adequate insurance coverage? Long-term care planning? Are you minimizing taxes?
We can help your business better navigate risk and avoid a potential crisis. Here’s how:
1. Risk Mitigation:
- Identify and assess threats: Identify the impact of potential business threats including market volatility, economic downturns, changes in government and/or tax policy.
- Design multiple strategies: Create strategies such as diversifying and/or reallocating investments and assets, construct a succession plan and exit strategy, assess insurance coverage.
2. Financial Analysis and Planning:
- Evaluate financial health: Analyze financials to determine how resources can be better allocated and identify financial inefficiencies/liabilities.
- Improve finances: Highlight areas of potential expense reduction, resource reallocation, or financial restructuring to boost cash flow.
- Identify/Evaluate Opportunities: Advisors can locate and evaluate potential acquisitions, partnerships and new business opportunities, help provide accurate business evaluations to bolster revenue sources and identify supply-chain risks.
- Financial planning: Furnish a comprehensive, long-term financial plan for your business and personal life as well as for partners and key-employees.
3. Strategic Guidance:
- Help reach long-term goals: Business changes. Advisors can help maintain a long-term focus and provide solutions to manage changing market conditions and personal circumstances.
- Identify funding needs: Financial advisors can help determine the amount of funding needed, review loan agreements and identify the most efficient sources of capital, including alternative lenders.
4. Intangibles:
- Network Support: Advisors are often well connected with other professionals such as accountants, lawyers, insurance experts, technology and security professionals, and employee-benefit consultants to offer a high level of expertise.
A financial advisor can furnish expertise, guidance and support to help business owners make better decisions and minimize the many forms of risk, ultimately helping them to reach their goals. Risk is a fact of life, so is managing it. If you’d like to see how we can help you better manage risk, please contact our office.
Rocco A. Carriero, MBA, CRPC®, APMA®
Private Wealth Advisor
President & CEO
Rocco A. Carriero Wealth Partners
A private wealth advisory practice of Ameriprise Financial Services, LLC
Rocco A. Carriero is the author of: Three Cords Approach to Life and Wealth Management for Business Owners. For a complimentary copy, please contact our office: 631-283-8482.