Derisking is the process of removing the "risk factors" from your business, in order to make it more attractive to an outside investor or even a financier.

Within a business there a literally dozens of areas and hundreds of ways in which a business may be exposed without knowing it.

In the normal course of operating a business, an owner may not worry about these factors, as they are within their normal “comfort zone”, business, industry or geographic sector.

For an external party to get involved however, they need a much more transparent process, structure and organisation, as they want to be sure there aren't any "skeletons in the closet".

Below is a small selection of some of the areas that need to be covered in a "de risking' process.

• Creating or clarifying agreements with suppliers, in writing.
• Creating or clarifying any credit terms and policies you have with clients or suppliers.
• Creating or clarifying agreements with customers.
• Documenting all policies, procedures and operations in a digital/hard form.
• Ensuring all employee agreements are up to date and legal.
• Ensuring environmental issues are covered and compliant.
• Ensuring insurances of assets are up to date, and sufficient.
• Ensuring the business and operations are OH&S compliant.
• Guarantees of a business, director or personal nature for any reason are listed with all details.
• Insurance details, coverage and costs including coverage and documentation is up to date.
• IP protection, ownership and registrations are up to date.
• IT protection of all data, including backups, privacy and access.
• Regulation Compliance with ATO, ASIC, business registrations, or licenses.

As you can see, this is a rather lengthy list and some of those items are very general in their wording.

Any due diligence process will unearth those areas that are seen to be risky, that may need further work and investment of time and money.

Depending on how your current business systems are set up, much of this information may already be in place and accessible.