May 19, 2020

Five Risk Management Issues for SMEs

business advice
Risk Management
Bizclik Editor
4 min
Five Risk Management Issues for SMEs

Read this article in the September Edition of Business Review Australia


The executive tasked with risk management in an SME has an unenviable task. There are wide ranges of issues you need to consider from a risk management perspective, and in most SMEs you’ll have a range of other tasks to perform as well. This article sets out the key legal issues to look out for in the risk management process.

1. Commercial & Contract

One of the biggest risk management issues faced by SMEs lies in the legal contracts the business has entered into, whether orally or in writing. As a new CFO or risk manager looking to implement an effective risk management process, an important yet painful task will be to complete a through legal due diligence review of all the businesses’ contracts. Obviously you’ll need to work with a lawyer to complete such a review, but you can minimise the cost of this by only asking for a high-level review to be conducted.

Upon the completion of such a review it’s a great idea to put in place a framework to ensure all future contracts are entered into set manner. Using a standard template Confidentiality Agreement, for instance, when negotiating commercial deals, is a simple and effective way of managing the risk of your businesses commercial secrets being misappropriated.

2. Regulatory & Compliance

The regulatory and compliance obligations of a business largely depend on the industry in which the business operates, as well as its size. A business operating in the financial services industry, for instance, will be heavily regulated. As the relevant risk management professional within your organisation, you will be obliged to comply with a host of regulations and rulings issued by organisations such as the Australian Investments and Securities Commission (ASIC) or the Australian Securities Exchange (ASX).

If your business operates in a less regulated industry, but deals with consumers, you will be required to comply with all relevant consumer rights legislation such as the Australian Consumer Law and enforced by organisations such as the Australian Competition and Consumer Commission (ACCC).

When completing your risk analysis, drawing up a matrix diagram of the regulations your business works under is an easy way of visualising your obligations.

3. Human Resources

One of the biggest risk management issues facing SMEs relates to the workforce. Human resource issues regularly cause severe problems for the management of SMEs. When completing your risk management analysis the first step is to ensure that each employee has signed a legal, valid and binding Employment Contract. You then need to work out which, if any, of your employees are governed by a Fair Work Australia Award. Make sure that those employees that should be covered by the award are being paid the appropriate rates.

It’s also vital that you ensure the business provides a good quality Employee Handbook to all employees; outlining expectations and requirements around areas such as Bullying and Discrimination, Workplace Health and Safety, Workplace Surveillance and Disputes.

Minimising risks relating to Human Resources is crucial, as the cost of terminating an employee or entering into a protracted dispute is high.

4. Environmental

Risk management in relation to environmental issues is very relevant to businesses operating in the industrial and rural sectors. There are pieces of government legislation that your business needs to adhere to, but these are quite specific to individual industries. It can be a good idea to work with an environmental consultant to complete a thorough audit of your operations.

5. Financial

Finally, the financial obligations of a business, in particular towards the Australian Tax Office (ATO), creditors and suppliers, should be considered both when performing a risk management review and in the course of everyday business. Businesses often get into trouble both from a cash flow perspective, and occasionally a profitability perspective, by ignoring their taxation liabilities.

To Conclude

Risk management in an SME is an important job, but is rarely assigned to a full-time risk manager. It’s important that you cover off the five key issues mentioned in this article; if needs be working with an expert can be a good idea.


About the Author

Lachlan McKnight is the CEO of, which provides online legal services, including customised legal document and fixed-fee online lawyers.

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Jun 8, 2021

Timeline: India takes unicorn leap with six in five days

Kate Birch
2 min
We chart an historic week in India’s startup tech industry, where from April 5-9 the country achieved six unicorns

We chart an historic week in India’s tech industry, where in just five days, between 5-9 April 2021, the country achieved six new unicorns, bringing India’s total to 10 in 2021 to date, an immense unicorn leap from just seven in 2020 and six in 2019.

April 5: Meesho

India’s first social commerce unicorn, Meesho raised US$300m from SoftBank, Facebook and Shunwei Capital, giving the Bangalore-based startup a US$2.1bn valuation, a threefold jump from its previous funding round in 2019. Founded in 2015 by two IIT-Delhi graduates, Meesho connects producers and resellers, helping small businesses sell through social media. It has 45m customers and has enabled 13m entrepreneurs to start their online businesses with no investment.

April 6: CRED

Founded just over two years ago, Bangalore-based credit card repayment app CRED raised US$215m from Falcon Edge Capital and Coatue, nearly trebling its valuation to US$2.2bn from its January US$80m round. Allowing customers to pay off their credit card debt while earning CRED coins which they cash in for rewards, CRED has grown rapidly during COVID-19, doubling its customer base to nearly 6 million in a year.

April 7: API Holdings / Groww

The first epharmacy startup to gain unicorn status, PharmEasy (API Holdings), which has digitised 60,000 brick and mortar pharmacies and 400 doctors across India, raised US$350m in a round led by Prosus Ventures. Founded by four former Flipkart employees as a way of making investing simple, investment platform Groww became India’s second-youngest fintech unicorn, raising US$83m in Series D funding led by Tiger Global, quadrupling its previous round in September.

April 8: ShareChat

New Delhi-grown social media startup ShareChat, founded in 2016 by Mohalla Tech raised US$502m from Lightspeed Ventures, Tiger Global, Twitter and Snap taking its raised total over six rounds to US$766m and pushing its valuation to US$2.1bn. The funding will be used to grow its user base and short video platform Moj, which launched in 2020 following TikTok’s ban in India. The regional language startup claims 280m users.

April 9: Gupshup

AI-led conversational message startup joined the unicorn club after raising US$100m from Tiger Global giving it a ten-fold valuation of US$1.4bn. The smart messaging platform, which has seen accelerated growth during the pandemic, was founded in Bangalore in 2005 by serial entrepreneur Beerud Sheth, whose online freelancing platform Elance is now listed. Gupshup’s API enables 100,000+ businesses to build messaging and conversation experiences across 30+ communication channels. 


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