Small Business Story: Jasmine’s Couture Struggles Without a Risk Manager

The CoverWallet Small Business Scholarship encourages entrepreneurship in students by asking them to take on the perspective of a local small business owner. Students share their perspective on the opportunities and challenges faced by a business in their community.

Student: Jasmine Hester, Mid Plains Community College, Business Administration

Small Business: Jasmine’s Couture

Jasmine's Couture

I have always had a strong love for fashion. Even as a young girl. I just love piecing outfits together, putting different colors and fabrics together to create a signature look. I’m all about making a statement and having an outfit that is the perfect attention grabber!

So, my love for boutiques should come as no surprise! Jasmine’s Couture is definitely my favorite local business. There is something about the atmosphere that boutiques have that is unexplainable. I love that the clothing in boutiques is stylish and chic, but different than what you’ll see in department stores. Boutiques are also decorated to the owner’s’ liking, so you also get a sense of their personal style.

Of course, with every business there are some disadvantages. Local boutiques can face high property taxes, insurance, security, labor and inventory costs which can leave boutique clothing stores with smaller profits than their online-only competitors. They also risk credit card theft and shoplifters that can decrease the profit boutique owners can make.

Emerging and changing risks are the new focus. These include network security, product liability for vendors, wage, and hour litigation. Network security is key, as this feeds into a retailer’s reputation- it has customer data, employee data, financial information and, in some cases, medical data. The risk is growing because bad actors are getting craftier and losses are high-profile.

Additionally, employment practices and liability policies exclude wage and hour claims. However, this often drives a retailer’s exposure. Also, retailers must continuously innovate and drive down costs so savings can be passed on to customers.

Although there are many risks associated with owning a local boutique, there are also ways to overcome those risks by hiring a risk manager. Risk managers can help their companies manage costs and allocate capital strategically while finding ways to stay ahead of market trends. They have the opportunity to help shape the business as they manage operations and costs. Risk managers are also responsible for mitigating — for keeping the operation efficient, making sure that the use of insurance, self-insurance and alternatives are in line with overall company objectives, and that the treatment of risk is agreed to by all internal stakeholders. As a retailer, these stakeholders can include treasury, legal, logistics, marketing, merchandising or IT.

With any business there is risk- hiring a risk manager is definitely a way to take care of some of the risks associated with running a successful business such as a local boutique.