Author Disclaimer:
This article is a study and a reflection of my PERSONAL PERSPECTIVE, formulated from various frameworks and best practices I have encountered in my academic and professional journey. The examples and figures presented are conceptual and should be treated as guiding principles, not as real-world scenarios or COMPLETELY validated data.
Readers are advised to use the content herein as a reference for exploring ideas and strategies, not as a definitive source of operational frameworks or policy implementation. While the insights aim to inspire critical thinking and understanding, they are not grounded in empirical research or official government practices.
Users should exercise discretion and seek further research or professional guidance when applying
these principles to real-life situations. ~JHMENOR
Essential Guide in Managing Risk for Small-Medium Enterprise (SME)
Managing risks is essential for the stability and growth of any business, especially for small and medium enterprises (SMEs) operating with limited capital. This Risk Register Report aims to identify, assess, and mitigate potential risks that could impact financial stability, operations, compliance, cybersecurity, and market conditions. By implementing a structured risk management approach, this report ensures that the SME remains resilient and compliant with Philippine regulations while proactively addressing potential threats.
Risk Register Report
Small-Medium Enterprise (SME) – ₱1 Million Capital
Risk Register Table
| Risk ID | Risk Category | Description | Probability (1-3) | Impact (1-3) | Risk Score | Mitigation Strategy | Related Law Compliance |
|---|---|---|---|---|---|---|---|
| R-001 | Financial | Cash Flow Shortage | 3 (Likely) | 3 (Critical) | 9 (High) | Establish an emergency fund, improve credit access, diversify revenue streams | Republic Act No. 11232 (Revised Corporation Code) |
| R-002 | Operational | Supply Chain Disruption | 2 (Possible) | 3 (Critical) | 6 (Moderate) | Maintain alternative suppliers, enhance inventory management | Department of Trade and Industry (DTI) Guidelines |
| R-003 | Compliance | Tax and Regulatory Issues | 2 (Possible) | 3 (Critical) | 6 (Moderate) | Ensure timely tax filing, hire compliance officers | National Internal Revenue Code (BIR Regulations) |
| R-004 | Cybersecurity | Data Breach | 2 (Possible) | 2 (Moderate) | 4 (Low) | Strengthen cybersecurity protocols, train employees | Data Privacy Act of 2012 (RA 10173) |
| R-005 | Market | Economic Downturn | 3 (Likely) | 2 (Moderate) | 6 (Moderate) | Develop flexible pricing, explore new markets | Securities Regulation Code (RA 8799) |
Financial Risk Threshold/Risk Appetite
Threshold: ₱100,000 (10% of Capital)
If financial losses exceed ₱100,000, immediate risk mitigation actions should be implemented.
Continuous monitoring and monthly financial reviews should be conducted to avoid exceeding this threshold.
Risk Mitigation Program Plan
1. Risk Monitoring and Assessment
Conduct quarterly risk assessments to update risk probabilities and impacts.
Use Key Performance Indicators (KPIs) to track financial and operational stability.
2. Preventive Actions
Establish a ₱100,000 emergency fund for financial contingencies.
Secure lines of credit with financial institutions for liquidity needs.
Strengthen supplier diversification and backup agreements.
3. Compliance and Legal Adherence
Maintain accurate tax records and ensure regulatory compliance with BIR and SEC.
Conduct annual legal audits to check for adherence to Philippine business laws.
4. Employee Training and Cybersecurity
Implement mandatory training on cybersecurity and compliance.
Regularly update IT security measures and ensure data privacy best practices.
5. Contingency and Recovery Planning
Develop a business continuity plan (BCP) for economic downturns or disruptions.
Review insurance policies for financial protection against unforeseen risks.
Conclusion
This Risk Register provides a structured approach for risk identification, assessment, and mitigation. The risk threshold of ₱100,000 ensures financial stability while the risk mitigation program protects the SME from high-impact threats. Regular monitoring and compliance with Philippine laws will strengthen business resilience.
