The Clifton Review  

The Clifton Review is a tri-weekly column that examines the question of the Clifton project along with the evolution of the war between two billionaires. We covered the start of this war with articles describing the battle over easement rights, the mysterious burning of a home, the blocks to rebuilding, and countless questionable court filings.

While the 2018 series salutes fashion mogul Peter Nygård’s Golden Jubilee detailing his rags to riches story, his incredible business success over these past fifty years and an inside look at how he did it, The Clifton Review will also continue to address current affairs as they relate to the good of The Bahamas.  

Considerations For Assessing Business Risks

By P.J. Malone 

So, how do you protect your business? Where should one start when having to assess any threats to their business?

We saw how fashion mogul Peter Nygard managed to avert the decline of his business by taking a number of important steps. The steps he took are steps that anyone can apply to their business. They include both logical steps and technical steps that can help you assess the risks facing your business and the actions to mitigate any threats.

But first, you have to have the right frame of mind when you are in business. That means always being observant and having your ear to the ground. It’s not enough to simply look around the community to see if any new store fronts are going up because competition or threats to your business viability can come from several directions.

We are not suggesting that business persons remain in “pary” mode and worry about everything going on related to their business. What is being suggested is that you should periodically study market conditions to be able to see what’s coming so you can prepare to address it and not allow it to, not just reduce profits, but threaten the viability of your business.

Risk Assessment Considerations

The first level of risk assessment is related to industry:

Businesses owners always have to keep their ear to the ground to keep track of what’s going on in their industry. Just as in Nygard’s case when he noticed that there was a move away from polyester, which would have threatened any business whose core product and focus was polyester.

The next level of risk assessment is related to the competition.

New competition as well as companies embarking on innovations can negatively impact your business. If you are a leader in your industry, but a smaller maybe unknown company decides to get innovative and come up with new products that your customers would prefer, then that would pose a threat to your business. So competition can come fromnot just the opening of new businesses, but from existing businesses making changes as well.

The key is in understanding that you can’t wait until after they have developed a new product to react; you have to try to keep track of the direction they might be going in before it happens. Staying abreast of industry changes and demands helps to be able to do that.

A third level of risk assessment is related to your customers and your customers’ customers.

What does this mean?

Let’s use Nygard’s example: When Nygard’s business was threatened, he was a manufacturer. So his core customers were those stores that sold his clothes to women. One reason Nygard has been so successful is that he has always had his ear to the ground and finding out from his customers’ customers—the women who wear his clothes—directly what he should be designing for them.

When there was a move away from polyester, it was the department stores trying to make that move. However, Nygard felt that these department stores’ customers still wanted his product because he always knew their desires from the customer surveys he continuously implemented. Considering that he knew what the women wanted, he didn’t want to give them up even though his direct customers (department stores)wanted to make a move.

So he took steps to protect his business based on what he knew from continuous assessments. What he did next relates to having an agile business, but that’s a discussion for another time. For now, know that assessing the risks as it relates to your customers may require a look several layers deep depending on the type of business you are in.

In upcoming editions, we’ll continue to discuss risk considerations and review the steps that can be taken to avert any threats to your business.