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Hearty Tips To SME Owners: Industry-Specific Business Risks And Mitigation Measures

Protect your business

Are you a business owner? Or are you planning to start your own business?

Risk is a big part of owning and running a business. It is very important to recognise these risks and be aware of them from the very beginning.


While you can work hard to establish a successful business, unforeseen incidents could derail it. Researches have shown that only 1 in 2 small and medium-sized enterprises (SMEs) make it beyond their fifth year, suggesting that running a successful business requires managing risks effectively.


Let’s take a look at the common risks for several industries and the mitigation measures. 


1. Food and Beverage (F&B) Outlets

It takes attention to detail to create a profitable F&B business, including the freshness of ingredients, the right equipment and a dedicated, service-oriented workforce. Even with these elements in place,  unforeseen circumstances can destroy a business.

To reduce the risk of accidents, using these guidelines to ensure safety is an integral part of the operations.

A. Kitchen Fires

These unforeseen hazards are probably the most common accidents that can happen to restaurants and food chains with kitchens, gas tanks and.  Having adequate fire protection as per regulations with proper testing and maintenance is very important for the F&B businesses.

At the same time, they need to ensure that the cleanliness of their kitchen is properly maintained throughout the day to offset the risk of grease fires.  Also, gas detectors have to be installed and the pipelines have to be regularly checked for leaks, corrosion or damage. Finally, electrical fires can be prevented through periodic testing and maintenance of electrical equipment.

B. Spoilage and Contamination

Some issues are within the control of the business owner such as spoilage or contamination of food, which could result in costly damage to their business and loss of income. Therefore, it is advisable to set up periodic cleaning schedules in ensuring kitchen hygiene and conduct thorough quality control processes to uphold products safety

2. Retail Stores

Retailers should adopt strategies to minimize the risks that could force them to shut down their business, thinking ahead and accounting for all the things that could go wrong. Let's take a quick look at the top risks:

A. Theft

Burglary and theft can be damaging to retail stores. Burglaries and shoplifting happen all the time so preventive measures are a must. One the ways to reduce risk of theft is by installing burglary alarm systems and security cameras to monitor customers and employees. The recorded footages can be used to support the claims process in the event that a theft has taken place. Some stores may benefit from electronic tracking devices on their merchandise. Businesses should also have periodic checks on the cash register with authorized signatory.

B. Public Liability

For businesses that deal with customers on a daily basis, slips and falls are one of the most common commercial hazards. If a customer or other third parties slip on the floor and injure themselves, it could lead to a lawsuit. Therefore during the cleaning process, it is crucial to display proper signage to warn the public about the wet floor. This reduce the amount of slips and spills that can later become a major legal burden for businesses.

C. Inventory

Opening a retail store requires purchasing and replenishing a large stock of merchandise frequently. As the inventory is the livelihood of retailers, business owners need to manage the risk of losing inventory by implementing a routine verification procedure with authorized signatory. They have to check the inventory at the beginning and the end of every business day to ensure that the businesses are not losing revenue to employee or customer theft.


3. Beauty and Wellness Centres

Salons and wellness centre are all about making people feel good about themselves. But the array of chemicals, products, trimmers, dryers and other machines employed in the process creates an environment with risk of accidents and personal injuries. Such incidents at the premise could trigger public liability suits that can turn costly. Not only will the business be financially hit, the reputation could also suffer a negative backlash if a third party is hurt at your premises. Here are the risks and mitigation measures for the beauty and wellness industry.

A. Personal Injury and Treatment Risks

Major and minor injuries to both clients and employees can be caused by slippery floors due to product spills and hair clippings, burns from dryers and curling irons, and cuts from razors. Businesses should train the employees to keep the salon clean and safe. Regularly sweep up hair clippings, mop up any product spills immediately to limit the chance of slips and falls.  All equipment that comes in direct contact with customers have to be cleaned and disinfected frequently.  

B. Chemical Hazards

Apart from injuries caused by typical slips and falls, salons and wellness centre owners also face risks tied to their professional services. If a chemical gets into a client’s eyes or mouth, or they suffer an allergic reaction to a product applied, business owners could get sued. It is very important for the business and its employees to know the chemicals and ingredients in the product inventory, and understand how these chemicals may react with one another, particularly if they spill and get mixed together.

4.  Accounting Firms

Accountants, tax professionals, and audit firms gather, process, and store sensitive client data. But they don’t just crunch numbers. They must also contend with individual and corporate clients who may be anxious or worried about tax liabilities, a myriad of regulations, increasingly dense and ever-changing tax codes.

A. Data and Security Breaches

Virtually every business collects and stores personal information on both employees and clients. But accountants may have more sensitive data in their computers and file cabinets than just about any other service provider, making the protection of that data critical to the survival of their business.

It is advisable to create strong passwords for all electronic files. Consider using a password management programme to generate and store passwords. Encrypting client data not only makes it harder for others to get their hands on the information, it can put the clients’ minds at ease and increase trust. Paper records should always be under lock and key. Restrict access to an as-needed basis.

Despite the underlying element of uncertainty, it is often possible to manage risks, and to put in place preventive measures and contingency plans to minimize the negative impacts to business.

Due to various limitations, SMEs are more exposed and less resilient to the negative aspects of risks as compare to large corporations which are better equipped and relatively well structured to deal with risks. However, due to the flexibility of SMEs, and if work with the right partner, they can tap into opportunities to increase their market share, grow and manage risk more effectively.

AXA has a long history of protecting SME businesses across a wide range of categories. With this experience, AXA is able to provide expert advice and consultation to business owners, and assist them in choosing the right cover for their business based on their needs, whichever category or industry they are in – from cafes, offices, and even factories.


Here is what some business don’t realise, some of the risks can actually be transferred to insurance companies by insuring against major risks faced by the businesses. AXA Affin General Insurance Berhad (AXA Affin) supports SMEs with a product range suitable for specific industry needs. AXA SME Insurance is able to tailor-make a protection plan for your type of business, be it Retail, Beauty and Wellness, Specialised Services and others.

All AXA SME Insurance plans offer 20% cash advance payment in 5 working days based on initial estimate of loss. This unique feature allows SMEs to get back into business faster should unforeseen events happen.

To find out more about SmartBusiness solutions, logon to to get help from our professional AXA SME Experts.


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