Risk treatment is about options for dealing with risks that are not acceptable. Risk treatment involves identifying controls for risk. The aim is to either reduce or eliminate negative consequences, or to reduce the likelihood of an adverse occurrence. Risk treatment should also enhance positive outcomes.
It is often not possible, nor cost-effective to implement all treatment strategies. A business owner should choose, prioritise and implement the best combination of risk treatments.
The steps to this are:
- identify – develop and design treatment options
- evaluate – do the options satisfy treatment objectives and are they cost effective?
- develop and implement a risk treatments and controls.
For small businesses, many of the treatments are often part of establishing everyday business practices and procedures such as:
Therefore, ensuring good management practices are already in place will help you control risks from the outset.
A quality assurance program can also help to control risk. Quality assurance is the process that continues from risk treatment through monitoring and review to a cycle of continuous improvement.
All risk treatments should be documented in your risk management plan.