Oxford Bank Corporation · OTC:OXBC
Oxford Bank — Investor Presentation (September 2016)
47 slides from Oxford Bank's investor presentation, September 2016
Slide 1: Risk Management for a Small Business
Risk Management FOR A SMALL BUSINESS Updated: 09-2016
Slide 2: Welcome
Welcome 1. Agenda 2. Ground Rules 3. Introductions RISK MANAGEMENT 2
Slide 3: Objectives
Objectives • Identify the common risks associated with a small business • Identify the external and internal factors which affect risk for a small business • Identify situations which may cause risk for a small business RISK MANAGEMENT 3
Slide 4: Objectives, continued
Objectives, continued • Identify the common warning signs of risk for a small business • Implement, monitor, and evaluate a risk management plan for a small business RISK MANAGEMENT 4
Slide 5: What Do You Know?
What Do You Know? What do you know or want to learn about risk management? RISK MANAGEMENT 5
Slide 6: Why Risk Management?
Why Risk Management? • Identifying areas of threat to the business • Assessing the potential impacts and managing these • Growth and continued existence of the business RISK MANAGEMENT 6
Slide 7: Discussion Point #1: Risks from Positive Situations
Discussion Point #1: Risks from Positive Situations What positive situations or opportunities can you think of that may be risks? RISK MANAGEMENT 7
Slide 8: Internal Risks
Internal Risks RISK MANAGEMENT 8
Slide 9: Human Risks
Human Risks • Death • Owner • Employee • Illness • Short term • Long term • Indefinite RISK MANAGEMENT 9
Slide 10: Human Risks (continued)
Human Risks (continued) • Theft and fraud • Product and inventory theft • Time sheet fraud • Accounting and cash fraud • Low morale, dissatisfaction • Failure to perform • Sabotage of systems, equipment or customers RISK MANAGEMENT 10
Slide 11: Equipment and Information Technology Risks
Equipment and Information Technology Risks • Equipment breakdowns • New equipment integration • Worn older equipment • Damage to vehicles RISK MANAGEMENT 11
Slide 12: More Equipment and Information Technology Risks
More Equipment and Information Technology Risks Information technology downtime • Lack of backup or recovery system • Updates and repairs • Power and connectivity (physical damage and outdated systems) • Lack of administrative controls RISK MANAGEMENT 12
Slide 13: Other Internal Risks
Other Internal Risks • Physical plant repairs • Breaks in lines or utilities • Routine maintenance • Incidents • Work related injuries • Damage to others’ property by employees • Damage to your property by others RISK MANAGEMENT 13
Slide 14: Cash-Related Internal Risks
Cash-Related Internal Risks Cash flow changes • Unexpected costs • Loss of credit lines • Expenses to establish lines of credit RISK MANAGEMENT 14
Slide 15: Activity 2: Internal Risks
Activity 2: Internal Risks What other internal risks can a business owner control? RISK MANAGEMENT 15
Slide 16: External Risks
External Risks RISK MANAGEMENT 16
Slide 17: Competition and Market Risks
Competition and Market Risks • Loss of clients or customers • Loss of employees • Decrease in sales prices/fluctuating markets • Increases in vendor costs • Oil or gasoline price increases • Fixed cost changes (e.g., rent) RISK MANAGEMENT 17
Slide 18: Business Environment Risks
Business Environment Risks • Laws • Weather • Natural Disaster • Community RISK MANAGEMENT 18
Slide 19: Discussion Point #3: External Risks
Discussion Point #3: External Risks You own a steak house. A tainted meat scare in your area changes demand. How do you manage this risk or control its effects? RISK MANAGEMENT 19
Slide 20: Personal Conflict Risks
Personal Conflict Risks • Family obligations, illnesses or deaths • Events of disaster that affect the home • Community involvement • Complacency RISK MANAGEMENT 20
Slide 21: Discussion Point #4: Risks to Continued Operations
Discussion Point #4: Risks to Continued Operations What is required for your business to continue operations? RISK MANAGEMENT 21
Slide 22: Risk Identification
Risk Identification • Written business plan • Outside sources to assist in identifying • Risks of your vendors or supplier • Business continuity assessment RISK MANAGEMENT 22
Slide 23: Warning Signs
Warning Signs • Excessive debt in relation to owner’s equity (total liabilities / owner’s equity) • Reliance on a small number of customers • Reliance on one product • Reliance on one or a small number of vendors RISK MANAGEMENT 23
Slide 24: Warning Signs (continued)
Warning Signs (continued) • Cash flow problems • Irregularities in accounting, bank or timecard records • Irregularities in computer system administrative reports • High employee turnover rate RISK MANAGEMENT 24
Slide 25: Risk Evaluation
Risk Evaluation • Identify needs for business continuity • Identify needs for potential or planned growth • Discuss risks with managers • Communicate risks to managers RISK MANAGEMENT 25
Slide 26: SWOT Analysis
SWOT Analysis • Strengths • Weaknesses • Opportunities • Threats RISK MANAGEMENT 26
Slide 27: Other Resources
Other Resources Bank or Small Business Audit Firm or Commercial Administration CPA Lender Risk Insurance Internet Source Provider RISK MANAGEMENT 27
Slide 28: Risk Measurement
Risk Measurement • Effect on potential earnings and cash flow • Impact on the business for future growth • Costs related to the risk, should it occur • What would change in your business as a result • Weighing costs versus the benefits of the control RISK MANAGEMENT 28
Slide 29: Importance of Risk Management
Importance of Risk Management Cash Flow Stability Credit Longevity RISK MANAGEMENT 29
Slide 30: Risk Control Management and Implementation
Risk Control Management and Implementation RISK MANAGEMENT 30
Slide 31: Equipment and Vendors
Equipment and Vendors • Inclusion in initial written business plan • Readdress, monitor and update business plan periodically • Insure equipment and use service plans • Know your vendors and suppliers – backup relationships RISK MANAGEMENT 31
Slide 32: Business Continuity
Business Continuity • Location to continue business operations • Establish a manual system • Train staff to continue operations • Backup operating systems, list staff duties and contacts • Review contracts with vendors for provisions • Know systems provider backup and contingency operational plans R
Slide 33: Information Technology Systems
Information Technology Systems • Do not share login information • Protect systems with firewalls • Institute levels of access • Perform other reports • Sample transactions or use trial transactions • Conduct scheduled and surprise audits RISK MANAGEMENT 33
Slide 34: Competition
Competition • Shop them • Check advertising • Product lines • Pricing • Customer interaction • Employee retention RISK MANAGEMENT 34
Slide 35: Activity 5: Assets
Activity 5: Assets What is your most liquid asset? How can you protect it? RISK MANAGEMENT 35
Slide 36: Accounting and Cash Control
Accounting and Cash Control • Separation of duties • Dual control of cash • Levels of authority observed • Periodic audits • Surprise audits • Insured deposits – FDIC • Plan for reserves in the budget RISK MANAGEMENT 36
Slide 37: Employee Management
Employee Management • Pre-employment screening and background checks • Job descriptions and duties • Communicate clear expectations • Cross train staff • Identify temp agencies that specialize in your field • Periodic evaluations and feedback RISK MANAGEMENT 37
Slide 38: Employee Management (continued)
Employee Management (continued) • Manage by being present or walking around • Audit for payroll or time fraud • Benefits and compensation for retention • Incentives to avoid injuries and damages RISK MANAGEMENT 38
Slide 39: Business Work Strategy
Business Work Strategy How can you manage your own risks? • Set work hours • Plan work with a balance • Set realistic goals • Train support staff or an assistant • Include in disability or death in business plan • Support system • Anticipate family and home needs RISK MANAGEMENT 39
Slide 40: More on Control Management
More on Control Management • Communication within organization • Routine assessment of physical plant • Be alert to changes in the community and laws • Awareness of news in the economy • Utilize lines of credit only when needed • Insure against damages from weather and disasters • Backup utilities –
Slide 41: Lead by Example
Lead by Example Ethical and honest behavior will begin with management RISK MANAGEMENT 41
Slide 42: Exit Strategy
Exit Strategy • Include exit strategy in business plan • Revisit it periodically • Insurance payment and liquidation of assets • Liquidation of assets without insurance • Trustee to handle • Family member • Employees RISK MANAGEMENT 42
Slide 43: Plan and manage risks to succeed!
Plan and manage risks to succeed! RISK MANAGEMENT 43
Slide 44: Eight Key Points to Remember
Eight Key Points to Remember • There are internal and external risks associated with a small business • Begin assessing the risks by completing a list of those events or resources involved with the business that could impact continued operations and cash flow • The costs to insure or minimize risks
Slide 45: Eight Key Points to Remember (continued)
Eight Key Points to Remember (continued) • Strategies to avoid risks can include communication, setting expectations, support systems, training staff, insurance, assessment and contingency planning • Be honest in reviewing your business for risk and warning signs • Seek assistance from others • An e
Slide 46: Summary
Summary • What final questions do you have? • What have you learned? • How would you evaluate the training? RISK MANAGEMENT 46
Slide 47: Conclusion
Conclusion You learned about: • Internal and external risks of a small business • How to identify and reduce the negative effects these can have on your business • Warning signs of risk • The steps in risk management planning • The importance of containing these risks • The need for an exit strategy