Why is risk management important for growth?

“In a recent series of articles, the IBJ discussed how manufacturers of parts for combustion engines were retooling their business to adapt to the expected prevalence of electric cars. Though I do not manage an accounting firm, I can imagine partners of CPA firms are doing a similar analysis regarding the mix of services the firm should offer in the future. In recent years, CPAs in Indiana and across the country have overcome the challenges they’ve faced adapting to a virtual business environment, a shrinking pipeline, cybersecurity, and helping their clients navigate the ever-changing tax laws. As we move forward, CPAs are now considering how to take the lessons learned to enhance the firm for the future. When I am advising students about a decision regarding a career path or trying a new course, I ask them, “What’s the worst that can happen?” This is a sound question to ask in most situations. What’s the worst that can happen if you try something new? What’s the worst that can happen if you don’t?”

Diane L. Sturek, CPA, MAcc
INCPAS Chair
Indiana University Kelley School of Business

“All organizations face risks due to uncertainty. Strategic planning without addressing risks could result in unexpected consequences and failure. As firms evaluate their strategic plan, they need to consider potential risks and how those risks will be managed to reduce the risk to a tolerable level. Any organization that strives to grow takes on risk. Whether it be acquiring another firm, adding a new service line or entering a new client market, pursuing growth brings uncertainty and risk.”

Carrie B. Minnich, CPA, Macct
INCPAS Chair-Elect
Dulin, Ward & DeWald, Inc.

“The INCPAS Board of Directors has used the last couple of years to evaluate strategies that will allow us to grow and meet our financial goals. Understanding and managing the risks associated are critical to the process. What do we do best? Where do we have the highest risk of failure? Using data analytics to understand where we’ve historically done well and/or poorly can help us move forward and identify the type of work that we want to continue to do. More importantly though, it tells us what opportunities we have to improve. Technology can also help us manage the risk of human error on our projects and we’ve started implementing new software to assist our project teams, allowing them the time to focus on problem solving and client relations. Finally, understanding our risk tolerance, coupled with good financial projections, allows us to consider growth through acquisition, new business lines or other investments.”

Melanie King, CPA
INCPAS Vice Chair
The Hagerman Group

“Risk management is important for growth. When considering expanding your services, it is crucial to identify your desire, ability and need for risk. In building an advisory practice, you not only need individuals continually driving new projects, but you also need people who have the ability to deliver exceptional work on the scope of services sold. Since advisory practices often are niche practices with specific skill sets, you need to determine what risk exists after the practice is built, while retaining a team to deliver the services.”

Kyle A. Simmerman, CPA
INCPAS Vice Chair
BGBC Partners, LLP

“Risk management is essential for business growth and ultimate success. Considering risks by categories is often helpful: people, technology, processes and facilities. Do we have the proper people with the proper skill set to pursue this new venture? Do we have the technology needed to protect ourselves from outside threats? Are there processes in place to support this activity? Is our facility adequate? Having a long-term view of the kinds of risks that can disrupt your business and planning accordingly are key.” 

Lisa D. Tressler, CPA
INCPAS Vice Chair
RBSK Partners PC