What is a Risk Assessment Matrix? This is a question that many business owners and managers ask themselves. A Risk Assessment Matrix, or RAM for short, helps you identify potential business risks and develop mitigation strategies. There are three key points that every business should remember when creating a RAM: identifying the risks, assessing the risks, and mitigating the risks. Let’s take a closer look at each of these points.
The first step is identifying the risks. This may seem like a daunting task, but there are many resources available to help you. The Small Business Administration has a great tool that can help you identify the risks specific to your business. Once you have identified the risks, it’s time to assess them.
To assess the risks, you need to consider two factors: the likelihood of the risk occurring and the impact of the risk if it does occur. The likelihood is usually represented on a scale of one to five, with one being very unlikely and five being very likely. The impact is usually represented on a scale of one to three, with one being low impact and three being high impact.
Once you have considered the likelihood and impact of each risk, you can then create a risk matrix. This is a table with the risks listed from highest to lowest. The risk matrix will help you prioritize which risks need to be addressed first.
There are many different ways to create a risk matrix. The most important thing is to use a system that makes sense to you and can easily understand.
If you are looking for more information on risk matrices, many resources are available online. You can also talk to your supervisor or another experienced individual to get their thoughts on the best way to create a risk matrix.
