Risk Management for SMEs: Looking Ahead

In 2025, around 12,500 companies in Switzerland entered bankruptcy proceedings. Young companies account for a large proportion, but established businesses are also affected. Often, what is missing is a simple risk management system that identifies risks at an early stage – while there is still room to take action.

Financial difficulties often develop gradually. However, they can also arise suddenly, for example due to dependence on individual major customers. This makes financial indicators – particularly with a focus on liquidity and profitability – an important tool. The earlier a company identifies risks and imbalances, the better it can respond. Even simple measures prove helpful: systematic monitoring of accounts receivable and accounts payable, a monthly liquidity overview or a risk list identifying the greatest financial uncertainties. If it becomes apparent that the balance between income and expenditure is becoming unstable, the causes can be investigated in a targeted manner and appropriate measures initiated.

Accelerating Change

Risks arising from changes in the customer market should also be incorporated into business planning. These changes are often driven by technological developments. What was still a service yesterday – booking a trip, creating a website or producing marketing materials – is now done by many customers themselves via the internet and digital applications. Artificial intelligence is likely to accelerate this development further. On the one hand, AI offers opportunities to improve a company’s own business model, but it also involves risks.

Today, an architectural firm, a landscaping company, an advertising agency, a carpentry business or a kitchen construction company must increasingly expect potential customers to approach them with their own designs and visualisations already prepared. One of the associated risks is that customers’ willingness to pay for professional advice is declining.

In addition, there are regulatory changes. These may take the form of stricter legislation, but also higher requirements and standards imposed by individual major customers – for example in the areas of the environment or product safety.

Social norms, and with them customer and consumer behaviour, are also changing very rapidly in some cases. A simple example: younger generations no longer go to a café for their morning coffee and croissant. Instead, they use takeaways that sell their customers not only a trendy product but also a piece of lifestyle.

Increasing Reputational Risks

When things go wrong, a company’s good reputation can be at risk from one day to the next. There are many potential causes: poor reviews or even a social media backlash, serious misconduct by employees, or problems with a defective product that causes harm to people.

Such events can suddenly plunge a company into a crisis. The chances of preventing or mitigating such a crisis increase considerably if the relevant crisis scenarios have already been prepared and are ready to use – with clear responsibilities, defined procedures, an agreed set of values and general communication templates.

What if …

Risks differ depending on the nature of the business. However, one thing that can bring almost any company to a standstill is an information technology failure – including cyberattacks – or technical disruptions in general.

Companies should prepare for such risks as effectively as possible. The central question is: What needs to function so that, in the event of an emergency, we can resume operations as quickly as possible?

Process overviews can help here. They make critical points visible and allow alternative solutions and emergency plans to be defined in advance. This also includes arrangements for deputies and access rights, as well as password lists in case individual responsible persons are absent or unavailable at short notice during a crisis.