MFRisk Solutions

July 8th, 2009 by | Print

MFRisk photoAre you aware of the risks inherent in your solopreneur start-up? Obviously, the worst time to answer, yes, is after an incident – wishing you had coverage. Today’s interview is with Michael Ferreira, the solopreneur risk assessment and abatement specialist behind MFRisk Solutions.

 

Let’s see what Michael has to say about some of the obvious (and latent) hazards solopreneurs face in today’s business environment and what we can do about them.

 

 

TSG:     Under your “About” page, it states, “… Michael Ferreira has been a trusted advisor to some of the world’s largest organizations …”. How do you translate this experience to assist solopreneurs?

 

MFRS:     Risk is faced by organizations of all sizes. The only difference between a solopreneur and a global company is size. My focus is helping the solopreneur identify risk, assess and quantify it and develop a risk management program to address business risk.

 

 

TSG:     Do you operate MFRisk Solutions as a solopreneur?

 

MFRS:     Yes, and I walk my talk. 

 

 

TSG:     How long has MFRisk Solutions been in business?

 

MFRS:     MFRisk Solutions began in January 2009.

 

 

TSG:     Do you provide services to the full spectrum of solopreneurs or do you focus on specific industries?

 

MFRS:     I provide my service to solopreneurs in all business categories across all industries.

 

 

TSG:     Are there certain high-risk industries as a whole for solopreneurs?

 

MFRS:     Organizations face various risks. The four quadrants are Financial, Strategic, Operational and Hazard. Risk factors in one quadrant may be “high” but considered “low” in another quadrant. In every industry, there is a degree of risk. The assessment of that risk and measurement of its potential rewards and consequences should be part of a solopreneurs business plan.

 

 

TSG:     Can you give an example of Financial, Strategic, Operational and Hazard risks for solopreneurs that you help identify and find coverage for?

 

MFRS:     Financial – credit risk. If you have cash receipts and the person making the deposit is robbed and the cash stolen, coverage is afforded under a Crime policy (provided the solopreneur purchased one).

 

Strategic – Competition. Understand who your competitors are, their strengths and weaknesses and the threats and opportunities they present for you. Sorry, no insurance coverage for this.

 

Operational – critical customer information is stored on a server. What is the back-up in the event primary server goes off-line? May or may not be coverage subject to the reason the primary server does not operate.

 

Hazard – fire occurs at the manufacturing plant delaying fulfillment of orders placed by customers. Existing orders are canceled and new orders drop off as customers move their purchases to competitors. Negotiation of proper property coverage can afford coverage to the solopreneur for lost business income.

 

 

TSG:     When you provide your free 30-minute consultation, do you often find that solopreneurs are surprised to find the risks that you identify or are they aware that they are at risk, but don’t know how to cost-effectively protect their businesses?

 

MFRS:     Most solopreneurs are “subject-matter experts”. They have a particular skill, expertise or trade that may have been cultivated while in the employ of a large organization. Establishing your own business requires a departure from your comfort zone to respond to issues (risk) that were addressed by others in the organization (i.e., legal, finance, human resources, etc,).

 

 

TSG:     So if I understand what you are saying, you are addressing the issue of being responsible for all aspects of your business whereas in a company different professionals will cover those disciplines. I am a believer in outsourcing as a way to mitigate (not alleviate) some of that risk. Do you agree?

 

MFRS:     I agree that outsourcing activities to third-parties is appropriate when you do not have the expertise, manpower or capacity to perform that function. However, relying on third parties has inherent risk to the solopreneur.  What happens if the third-party suffers a failure? What is their capacity to respond in this event? Those risk should be assessed and informed decisions made as a result.

 

 

TSG:     What are common risks that you see across the board for solopreneurs?

 

MFRS:     The two most common are:  liability and property.

 

Liability-the tort system is alive and well in the United States but not understood by most business people. Liability can be created from giving advice to customers to delivering a product or service.

 

Property – most solopreneuers understand simple examples of loss of property such as a fire. However, certain property insurance coverage also reimburses a policyholder for extra expenses incurred and/or business income as a result of a covered loss. Solopreneurs need to become knowledgeable procurement people on their own behalf.

 

 

TSG:     One of the services that you list is suggestions regarding risk-transfer versus risk-assumption. Can you give an example?

 

MFRS:     A solopreneur establishes a business offering advice to customers on how to begin a home-based business. While the solopreneur does not guarantee success if you follow his formula, he does provide numerous examples of how the formula worked for him and has testimonials from other customers testifying to their success.

 

The risk is the potential liability if a customer (or group of customers) alleges that the solopreneur erroneously provided them with information and/or omitted information and as a result, they suffered damages (monetary loss) and are claiming compensation.

 

The solopreneur can assume this risk or he can transfer this risk by purchasing an errors & omission liability policy. This is a simple example for illustration purposes.

 

 

TSG:     Do customers normally contact you prior to opening for business or after they have an incident wishing they had met with you?

 

MFRS:     Both. For those customers beginning a business, the discussion is much more thought provoking and we develop an action item list. Many times I will help them craft their insurance purchases.

 

For the after-the-incident customers, we discuss mitigation strategies. While risk-transfer “after-the-fact” is typically not available, there may be a strategy to address the issue at hand and expedite it.

The troubling part is that most solopreneurs do not understand the potential drain on capital (usually their own) that such a loss can have.

 

 

TSG:     You list your rate of $125/hr on your site, which I believe most people appreciate and respect. How much time on average does it take for you to assist a solopreneur with risk assessment?

 

MFRS:     The more complex the business, the greater the investment of time. My services run the spectrum from assessment to quantification and identifying options to address risk. A number of my clients want me by their side while they are negotiating their insurance procurement or signing leases or other contracts. My goal is to educate the solopreneur to have the confidence to identify and address risks as the leader of an organization.

 

 

Thank you, Michael, for taking your time and educating us about some of the risks at hand.

 

Does this interview have you thinking about your risk exposure, my solo entrepreneur friend? Why not take advantage of Michael’s 30-minute free consultation? You can reach him at:

 

MFRisk Solutions
Michael Ferreira
W: www.mfrisksolutions.com
P: (917) 767-9123
E: Michael.ferreira@mfrisksolutions.com

 

Additionally, go to his web site where you can sign up for his mailing list to receive automatic updates on news, special offers and helpful tips, too.

 

All The Best,

Doug Dolan
The Solopreneur’s Guide

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One Response to “MFRisk Solutions”

  1. Bill Tilley Says:

    Thanks for the information on your background. I look forward to reading more of your insights.

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