In addition to being highly competitive, the relocation industry is a risk-filled environment. If you want your moving company to come out on top, you have to choose your battles carefully and your strategies with caution. And this is something that applies to businesses both big and small. So, to help your brand development strategies, I’ve decided to go a bit deeper into the issue of risk assessment. To be more precise, we will analyze the popular risk management tactics for movers to use in the development of their companies.
Why is having risk management tactics so important, to begin with?
It’s really simple. No matter how confident you are in the success of your business and the strength of your ambition, there are things you cannot control. Something can always go wrong – one of the first rules of business. And that is when you need to ask yourself: “Am I prepared for this? Do I have a contingency plan up my sleeve?”. Well, let’s take a closer look, shall we?
If you are a devoted business owner, then you know the importance of staying informed. And what better way to do this than by keeping track of moving industry news? If this is the case, then you might also be aware that there are always project risks that can take a turn for the worst. It is up to you to identify those risks early on and take the necessary precaution to put them to sleep.
Where to start?
Well, as all those moving jobs taught you by now – planning is the essential step to any successful relocation. The same rule applies to risk management. You start by creating a list of potential risks that you might come across as you develop your moving business. And as you create that list, you also need to think of an action plan for each scenario. That way, you will be well on your way to build an arsenal of risk management tactics for movers.
The five paths you can take in your risk management efforts
When you take everything into consideration, there are 5 risk management tactics for movers to turn to in their time of crisis:
- Acceptance
- Avoidance
- Transference
- Mitigation
- Exploitation
#1: Acceptance – embracing the risk
This is your typical improvisation approach and one that is ill-advised for anything other than minor risks. Basically, how it works is that you accept the risk, and once you identify it and log it in your risk management software, you stop there. You take no action and simply let it happen and then deal with it. Now, as I mentioned, this is something that will work out with minor risks that would take up too much time and resources to resolve without any major benefits.
#2: Avoidance – avoiding the risk altogether
Now, this is a strategy that better targets the larger and potentially more harmful risks in business. These types of risk management tactics for movers focus on changing your plan of action to avoid the bullet.
For example, May and June are your peak months for moving, but you have a new type of moving service that you want your team to learn. Now, putting them in this position could potentially downgrade the quality and quantity of moving jobs you book. So, rather than having them go through the procedure now, you delay it until the peak season passes and the timing is more convenient for training. This way, you avoid the risk of losing potential revenue in your busiest time of year.
#3: Transference – using 3rd party risk management
As far as risk management tactics for movers are concerned, this is not one that you tend to see often. It is more common with large logistics or moving companies, where more than one party is involved in the entire process. How it works is that you essentially transfer the management and potential impact of a particular risk to a 3rd party.
For example, if you were transporting expensive equipment or artwork via air freight, and you wanted to avoid the risk of an accident during transportation, you could take out insurance. Sign an agreement with an insurance company, leaving them liable in case anything was to happen to the cargo in question before it reaches the final destination. That way, you transfer the potential risk to the insurance company.
#4: Mitigation – giving power to the idea of teamwork
Probably the most commonly used risk management strategy that you can use. Mitigation comes pretty straightforward and is simple to implement. The basis is to reduce the potential impact of the risk, making the entire issue easier to resolve.
For example, you want to tap into the online market and start generating leads for moving companies through your website. However, none of your employees have the skill set necessary to make this happen. The result of this would be that any efforts you make or the resources you invest would go to waste.
Instead, you opt for hiring a company for SEO to help you out with this while also taking the chance to learn from them. Perhaps you have the right people for the job, but they simply lack the knowledge to do it – something that professionals can help with. So, by having others do the work and show you what it takes, you can learn and adapt your business model to it.
#5: Exploitation – the popular choice among risk management tactics for movers
We’ve covered ways in which to tackle the risks with negative impacts on certain projects. But what happens when you can benefit from a certain risk? That is when exploitation comes into play. You take the risk and nurture it to your advantage, increasing its effect and the gain it brings.
For example, if you were to get a last-minute cancellation of a last-minute local move, the resources for which you could refocus on a larger scale cross-country move. And to make things just a bit more to your liking, you could charge for the cancellation. So, you get a piece of the original deal while making ample space to handle a bigger one.
You hold all the cards in the end
These are the basic five risk management tactics for movers to implement in their business models. However, you will find yourself in the position to combine them how you best see fit, given the type of situation you find yourself in. No matter how you decide to tackle a certain risk, just remember to log it, as well as the plan of action, to better monitor your risk management process.
