1. Identify the risks
Use the list below to help identify risks:
- People e.g. injury.
- Operational e.g. failure of feeding system or machinery.
- Product / Service e.g. issue in performance or quality.
- Financial e.g. costs or income.
- Natural e.g. weather.
- Political e.g. new laws or regulations.
- Property e.g. damage to buildings or land.
2. Value the risk
a. What is the likelihood of the risk occurring – percentage.
b. What is the cost if the risk occurs – financial.
For example: what is the chance of the tractor breaking down (40%) what is the cost of the repair if it did (£2,000) the risk value is therefore £800. Compared to what is the risk of the barn being damaged in a storm (5%) but the cost of damage is £100,000 therefore the risk value is £5,000.
3. Manage the risk
Once you have identified the risks you can then look to reduce, manage, control or accept the risk. In the same example – you could reduce the risk through tractor maintenance, manage the risk through training staff to drive and maintain the tractor, control the risk through vehicle warranty/extended warranty or accept the risk.