A good attitude is a fuel that drives most entrepreneurs. So, it should come as no surprise that many business owners see themselves as risk takers. But taking too many risks can be costly. If you are a small business owner positioning yourself for growth, it is important to be aware of the common risks that your small business could face.
1 Internet / Cyber Attacks
The biggest and the best companies can afford in-house IT support; small companies can not. This puts small businesses, who are seen as easy targets, at the mercy of cybercriminals.
Your website is your digital storefront and you need to make sure it’s safe. Regardless of whether your website offers online payments or not, make sure you are taking the necessary steps to reduce the risk of Internet-based exposure.
Solution: Map out a strategy to help protect your business data, both on-site and remotely. This could include installing protection software. If you believe it would be difficult for your business to recover from a data loss, invest in a data compromise and identity recovery insurance. This protects you against loss or damage to computer equipment, data storage, electronic information, etc.
2 Business Interruption
Are you prepared for bad weather? Do you have a loss prevention plan in place in the event of a fire? Does your current insurance policy cover temporary relocation? These are all plausible situations that put your business at risk of incurring losses. Make sure that you have the right policies in place to ensure your business is still operational after an unexpected disruption.
Solution: Make sure to take time out from your schedule to create a disaster recovery plan. Come up with strategies on how to you will set up a remote location and alert your employees.
3 Property Loss
In their early days, many small businesses operate from a home office. If this is true for you, then make sure to review your home insurance policy. You may be surprised to find out that some insurance policies do not automatically cover business-related damages or losses.
Solution: Audit your physical location(s) to address areas of weakness or vulnerability. Review your home insurance policy to ensure your home office is covered against fire, storm and other disasters.
4 Injury / Health
You may feel fit and healthy today, but you do not know what the future holds. Workplace injuries or health issues can result in heavy medical treatment costs and loss of productivity for your company.
Solution: Educate yourself and your employees about workplace safety and ensure you have proper workers’ compensation insurance in place. Also, encourage your employees to take care of their health and adopt health dietary habits.
5 Financial Risks
Are you extending credit to your customers? Have you taken out a business loan? Are you filing your taxes on time? Many small businesses experience cash flow problems, especially in the early phases. Make sure you understand your company’s financial situation.
Solution: Education is financial freedom. Ensure that you fully understand what business accounting entails. If you do not have the capacity to handle your books, either hire an accountant or acquire the services of an accounting firm specialising in small businesses like yours.