Your business has been running well for 5, 10, or even 20 or more years. In fact, it has run very well. You’ve seen profits in all but one or two years. Your cash reserves have grown. You’ve made wise capital investments and good hires. You’ve built a customer base whose loyalty safely stretches far into the future—a secure feeling for any business owner.

Now, for some reason, other business owners, your best watchdog employee, and your most trusted advisors are telling you to implement a risk management plan. “You need to protect yourself better,” they’re saying. “You need to watch how money is spent, keep your vendors from charging you more money for inferior products, and watch what your former employees are doing with all the intellectual capital they built up under your roof … and, oh, by the way, the next economic downturn or hurricane could shut your doors for good.”

Isn’t your business the example of solid sales, solid operations, solid growth, and solid profits? Sure. Then, isn’t the scenario described above alarmist, fraught with paranoia? Perhaps—but only to an extent. The fact that you haven’t experienced a major risk event to this point means that you have likely used sound business practices. However, it also means you’ve been lucky. If you don’t implement some sort of risk management plan, the next economic downturn or other unplanned incident could become that major risk event.