Most Kiwi business owners think they’ve got risk covered. They’re wrong. Last year, over 60% of NZ companies faced unexpected financial hits because they missed key risks in their assessments. That’s the reality – and it’s why you need this guide.
Here’s the thing about business risk in New Zealand: it’s not just about earthquakes anymore. Sure, natural disasters are a big deal, but there’s way more that can trip you up. From cyber attacks to supply chain chaos, the threats are evolving fast.
This guide isn’t your typical boring rundown of risk management theory. We’re talking real, practical stuff that Kiwi businesses need to know. We’ll cover:
- Why most NZ risk assessments fail (and how to fix yours)
- The hidden risks that are probably costing you right now
- How to do a proper risk assessment without going crazy
- Real examples of NZ businesses that got it right (and wrong)
Let’s dive in and get your business properly protected.
What Actually Gets Covered in a Risk Assessment (And What Gets Missed)
Here’s a shocker – most NZ businesses are doing risk assessments all wrong. They focus on the obvious stuff and completely miss the risks that actually cause problems.
A good risk assessment isn’t just ticking boxes. It’s about really understanding what could hurt your business. Let’s break it down:
The Risks Everyone Thinks About (But Aren’t Enough)
- Natural disasters (yeah, we all know about earthquakes)
- Fire and property damage
- Theft and burglary
The Risks That Actually Cause Problems
- Cyber attacks (60% of NZ businesses got hit last year)
- Supply chain disruptions (ask anyone who tried to import in 2023)
- Regulatory changes (hello, new privacy laws!)
- Reputation damage (one bad review can go viral)
- Key person dependency (what happens if your star employee leaves?)
Here’s the kicker: according to MBIE, only 30% of Kiwi businesses are assessing these modern risks properly. That’s a lot of companies leaving themselves wide open.
How to Actually Do a Risk Assessment (Without Losing Your Mind)
Alright, let’s get practical. You don’t need a PhD to do this – you just need to be thorough and honest. Here’s a step-by-step process that won’t make you tear your hair out:
1. List Everything That Could Go Wrong
Seriously, go wild. Get your team together and brainstorm every possible thing that could hurt your business. Natural disasters, tech failures, angry customers, you name it. No idea is too crazy at this stage.
2. Figure Out How Likely Each Risk Is
This is where you get real. For each risk, ask yourself: How often could this actually happen? Once a year? Once a decade? Never, but it’d be a nightmare if it did?
3. Calculate the Potential Damage
If each risk happened, how bad would it be? We’re talking cold, hard cash here. Would it cost you $1,000? $100,000? Put you out of business entirely?
4. Prioritize Your Risks
Now’s the time to get strategic. Multiply the likelihood by the potential cost for each risk. This gives you a rough idea of which ones you need to focus on first.
5. Make a Plan for Each Major Risk
For your top risks, figure out how you’ll handle them. Can you prevent them entirely? Reduce the damage if they happen? Transfer the risk with insurance?
Here’s a real example: An Auckland IT company I worked with identified ransomware as a top risk. Their plan included:
- Weekly offsite backups
- Staff cybersecurity training
- Cyber insurance coverage
- Incident response plan
When they actually got hit six months later, they were back up and running in 48 hours. Their competitors? Some took weeks to recover.
The Risks Most Kiwi Businesses Are Getting Wrong
Let’s talk about some specific risks that are catching a lot of NZ companies off guard:
Cyber Attacks: It’s Not Just Big Companies Anymore
Small businesses think they’re not targets. They’re wrong. In 2023, 43% of all cyber attacks in NZ hit companies with fewer than 50 employees. Why? Because they’re easy targets.
What you need to do:
- Use proper cybersecurity software (not just the free stuff)
- Train your staff – most breaches happen because of human error
- Get cyber insurance – it’s not as expensive as you think
Supply Chain Chaos: It’s Not Over Yet
COVID might be mostly behind us, but supply chains are still a mess. Kiwi businesses are getting hit with delays, price hikes, and suppliers going bust.
What you need to do:
- Diversify your suppliers – don’t rely on just one
- Keep more stock on hand (yeah, it costs more, but it’s worth it)
- Have backup plans for critical supplies
Climate Change: It’s Affecting Your Business Now
This isn’t some far-off problem. NZ businesses are already feeling the heat (literally). Extreme weather is disrupting operations, changing customer behavior, and messing with insurance costs.
What you need to do:
- Assess your physical locations for climate risks
- Look at how changing weather could affect your customers
- Consider how climate regulations might impact your business
Getting Help with Your Risk Assessment
Look, doing a proper risk assessment takes time and expertise. If you’re feeling overwhelmed, it’s okay to get help. Here are some options:
- Talk to your insurance broker – they often offer risk assessment services
- Hire a risk management consultant (but check their NZ experience)
- Use online tools and templates (just make sure they’re NZ-specific)
- Join business groups – sharing experiences with other owners can be eye-opening
Remember, the cost of getting help is way less than the cost of missing a major risk.
Wrapping It Up: Your Action Plan
Alright, let’s boil this down to what you need to do right now:
- Set aside a day this month for a proper risk assessment
- Get your team involved – they’ll spot risks you might miss
- Focus on the modern risks we talked about, not just the obvious ones
- Make concrete plans for your top 3-5 risks
- Review your insurance – make sure it actually covers what you need
Remember, a good risk assessment isn’t about predicting the future. It’s about being prepared for whatever comes your way. Do it right, and you’ll sleep better at night knowing your business is ready for anything.
Need more help? Check out our risk management services or learn about tailored business insurance options. We’re here to make sure your Kiwi business stays safe and successful.