Most investments around the globe have some form of risk involved. The question comes down to the strategies in place to manage risks and mitigate losses. Your business should have an approach to identify the loss, where it’s coming from, and the involved party.
Each loss control strategy is tailored to the type and degree of the loss. Some of the kind of losses affecting businesses include;
• Inventory loss
• Supplier fraud
• Theft from employees
• Supply and inventory error
• Administrative mistakes
It is, therefore, imperative to identify the critical elements of loss in your business. Once you place the loss, move to analyze the loss severity and the right strategies to employ in your industry. That said, here are some loss control strategies that you may find helpful for your business.
In any business, it is imperative to identify the risks and liabilities involved. This way, you can know which approach to take and ensure your business is on the safe side. Avoidance is one way to control business loss as it involves eluding a risk that may lead to particular losses.
For example, you may choose to avoid making a risky investment to prevent counting losses. You may also avoid buying faulty products before selling. Although sometimes taking risks can pay in terms of revenue, avoiding them altogether is a way to circumvent significant losses.
It sucks when you have to say you saw it coming and didn’t take action. Identify the risks involved and determine the necessary methodologies to alleviate losses. If your retail business faces huge losses from shoplifting, it will help if you installed surveillance cameras. This way, you may not entirely stop shoplifting, but you may reduce the frequency.
Ensure that you also hire credible and honest employees if you’re counting losses coming from internal theft. It would be best to screen your employees properly and do a background check. This way, you can ensure that your personnel has integrity and consists of upright individuals.
Stick to Your Business Plan
The key to having a robust and surviving business includes having a proper business plan. The strategy should be in effect even after starting and growing the business. Thus, ensure that you assess your business plan and determine the goals your company has achieved.
Ensure that you evaluate your business plan and make the necessary updates. There may be changes due to new legislation or technological trends. Sticking to the plan ensures that you adhere to the objectives and achieve your goals without deviating from the main agenda.
It sucks having losses coming from lost paperwork or human error. Your employees may lose count when taking inventory, leading to false documents that cause significant losses. Thus, it would be best to invest in technology and incorporate it into your daily business operations.
Embracing technology will help automate certain activities and ensure the accuracy of your figures. For instance, you could acquire accounting software to ensure smooth bookkeeping and paycheck processing. This way, you can focus on controlling the losses and increasing your profit margin.
You can employ intelligent asset lockers that automatically record every transaction that goes through your business. This way, you can know about each item signed out and eliminate room for human error.
Lockers with content surveillance systems ensure that each item is placed in the right compartment. This way, you can reduce internal theft and ensure everything is returned once taken from the locker.
Check for Loss Trends
Some losses may occur over time, and some may be accumulative. Ensure that you have enough data to study, including your accounts, receipt books, and other relevant documents. Check for any emerging trends in your analysis and keep an eye on specific patterns or un-explainable losses.
Thus ensure you have scheduled, surprised, or regular audits. This way, you can keep a close eye on your performance, evaluate your losses, and identify the root problem. Audits will help you identify loss trends to employ prevention and control programs.