Small Business: Reducing The Risk

By Robert A. Gardner, CPP

Sound advice can make the difference between success and failure in a business. It can also make the difference between life and death.

Successful managers understand that no one person has all of the knowledge and experience needed to ensure that a business operates effectively and profitably. Even the smallest business requires at least the occasional services of outside professionals such as attorneys and accountants. Other experts in areas such as marketing, computer technology, personnel practices and insurance may also be consulted from time to time.

There is one critical area however, where outside professional advice is seldom sought by small businesses. That area is security and loss prevention. In spite of the importance of loss prevention planning, most managers give little thought to the subject and rarely consult with outside experts. Too often, loss prevention measures, if they exist at all, are implemented as a hurried reaction to a bad experience. These are frequently emotional rather than logical decisions. Little or no research is done. Little effort is made to distinguish between real and perceived problems. No consideration is given to alternatives. The end result is a collection of independently operating procedures that, in some cases, may actually make matters worse. The benefits of a thoughtfully designed and coordinated system are lost. The patchwork approach to problem solving works no better in loss prevention than it does in the rest of the business world.

Understanding The Risks

In order to implement an effective security program, managers must first be aware of the true threats to their business. Very few managers have the training and experience necessary to conduct a meaningful risk analysis for their business.

Just as legal issues require the skills of an experienced attorney to resolve, security issues require the skills of an experienced, independent security management professional.

Unfortunately, it is all too common that any security related advice and guidance a business manager may receive comes from a sales person rather than an independent security expert. While the sales person may know their product and its application intimately, most are not security management experts. Their focus is limited to the problem their product addresses and tends to ignore other threats. This approach to security management invariably results in inadequate protection and a false sense of security.

Implementing A Security Program

The first step in establishing an effective loss prevention program involves identifying the businesses' assets. Inventory, equipment, supplies and cash are assets; so are people. Protection of employees and customers is an essential, but often overlooked, program element.

Employee morale and public image are also assets. Where theft is rampant or violence presents a physical danger, both employee morale and public image suffer. Worst of all, irreparable harm occurs when fellow workers, customers or members of the public are harmed by an employee. A good public image is crucial. Lost property can be replaced. A business with a loss of employee or public trust may never recover.

The most important asset in any business is its personnel. A key element in every loss prevention program is the employee selection process. Background screening should be a standard part of the hiring routine. Identifying applicants with a history of dishonesty, violence, instability, questionable character or poor work habits before they're hired protects the business and its employees and helps to ensure an honest, dependable workforce.

The business itself is the ultimate asset and nowhere is it at greater risk than in the area of civil liability. "Failure to protect" and "negligent hiring and retention" are two rapidly growing areas of litigation. Business related injury, death or property loss suffered by anyone is certain to result in a lawsuit. Legal arguments will invoke the theory that the defendant - the business - knew, or should have known, that a danger existed and did nothing to eliminate it. Where injuries are caused by an employee, the plaintiff will try to show that the business negligently hired and retained a dangerous person. The Courts often hold businesses responsible for the security and safety of employees and visitors. This includes a duty to anticipate and prevent security problems. Businesses that don't conduct risk assessment surveys and don't perform background checks on new employees are prime candidates for future litigation.

Recognizing and understanding potential security risks and providing for the protection of a business, its employees and its customers is an important management function. Managers faced with responsibility for analyzing their businesses' security needs and for developing an effective security and loss prevention plan should take advantage of the expert advice and guidance available from an experienced independent security management consultant.

Copyright © 1995 by Robert A. Gardner, CPP


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