A risk management process is how business owners get ahead of the “what ifs” that come with running a company.
What if a project falls behind schedule? What if your most-skilled worker walks out the door? What if one accident threatens everything you’ve worked for? What if ...?
Every owner knows those worries – but few have a plan that truly answers them. That’s where the risk management process comes in. It’s about looking around the corner, spotting vulnerabilities and putting safeguards in place before small issues spiral into major setbacks. In doing so, you create a framework that protects your people, your profits and the long-term value of your business.
Let's unpack what a quality risk management process looks like, why it matters and how using a structured approach can give you more control – and more confidence – over the future of your company.
At its core, a risk management process is about bringing order to uncertainty. It gives you a structured way to spot potential threats, understand how serious they are and put practical strategies in place to reduce their impact.
While exact steps can vary, most frameworks include:
Think of the risk management process like keeping a fire extinguisher in your shop. You don’t expect a fire every day, and you certainly don’t want one. But sparks happen – maybe from a welder’s torch, a frayed wire or a simple mistake.
If you’re not prepared, a tiny spark can turn into a blaze that puts everything you’ve built at risk. But when you’ve planned ahead – extinguisher within reach – you can put it out before it spreads.
The risk management process works the same way. It makes sure you have the tools and plans in place so that small issues don’t grow into business-ending disasters.
For business owners – especially in construction, contracting and manufacturing – the stakes couldn’t be higher.
Your company isn’t just a line on a balance sheet. It’s your livelihood, your retirement plan, and in many cases, your legacy. Without a clear plan, one misstep – whether it’s a compliance fine, a jobsite accident or the sudden loss of a key employee – can send shockwaves through every corner of your business.
Picture this: a 35-person manufacturing shop suddenly loses its operations manager. Overnight, production slows, knowledge gaps appear, and clients start looking elsewhere. With no risk management process in place, the scramble begins. But with a plan? That role already has a documented succession path, a training strategy and a safety net that keeps the business moving forward.
That’s the real power of the process. It doesn’t just stop short-term chaos – it builds long-term stability.
Here’s the piece many owners miss: risks don’t exist in isolation. They ripple across your business from the inside out. A single safety lapse might start with medical bills but quickly snowballs into higher comp premiums, compliance problems, frustrated employees, and OSHA violations.
And external pressures can hit just as hard – in fact, 57% of U.S. industries would take six months to recover from only a one-week disruption in transportation and 25% of businesses do not reopen after a disaster. That’s how fragile operations can be without resilience planning.
The risk management process is holistic for this very reason: by connecting the dots, it ensures progress in one area strengthens the whole business.
The risk management process only works if it’s consistent and repeatable. That’s why we guide clients through a very simple, three-step process. It’s a practical, repeatable way to prioritize risks and build strategies around them.
Every plan begins with a conversation. We sit down with you and your decision-makers to talk through the risks that are most pressing within your business today. No two businesses share the same profile, so the process starts with understanding yours.
You should prioritize 10 areas of risk, which we call our “impact areas”:
By looking at all of these together, you see not just where your vulnerabilities are, but how they connect – and how they ultimately affect the value of your business.
Once you’ve prioritized the risks within your business. It’s time to tackle the most pressing one or two. You’re looking for immediate impact here. Maybe you’re retiring in two years and have no formal succession plan. Maybe you’ve been dropped from your insurance carrier and you need to find the best way to go to market. Maybe you're facing a legal dispute from a subcontractor and you need to evaluate your contractual risk transfer.
If you choose to deep dive this risk in-house, you’ll want to gather every team member who impacts that area and begin discussing those “what ifs” – get everything out there. On the other hand, you can work with a risk advisor who can help you evaluate your biggest risks. At Ellerbrock-Norris, we have proprietary technology that measures and benchmarks your risk so you can see where you align with similar sized competitors.
Once you know the risk you face, you can begin putting a plan in place to manage those risks.
A plan on its own doesn’t change anything. The risk management process gains traction when strategies become reality – whether you handle them in-house, use outside providers, or lean on us.
Learn what it looks like to work one-on-one with a risk consultant.
Risk evolves. Regulations shift, labor markets change, and unexpected events happen. That’s why the ENCORE process includes regular reviews – measuring progress and adjusting so your plan grows with your business.
You should be trying to tackle one major risk per quarter. This can be a new risk – or one you haven’t evaluated before – or it can be the same risk again. Think of it this way, your E-Mod is a major indicator of safety. However, the E-Mod looks at three years of trailing claims history. So you may want to deep dive safety or insurance multiple times to ensure you're impacting that E-Mod.
The risk management process isn’t a one-time checklist. It’s an ongoing cycle of identifying, analyzing and adapting. Done right, it doesn’t just shield your business from accidents and lawsuits – it positions you for growth, stronger valuations and a future you control.
At Ellerbrock-Norris, we’ve built our process to help owners like you see the full picture of risk and connect it to your goals. We act as your partner, not just your insurance broker, helping you make decisions that build long-term value.
Ready to start protecting your purpose? Let’s chat.