All business ventures require taking some kind of risk and this risk only expands along with your company. Small business owners are risk-takers by definition and will often need to take leaps of faith on a routine basis.
Just because risk taking is necessary doesn’t mean business owners can’t be clever about the risks they take. Overlooking key risk minimisation factors can hasten your path towards business disaster.
Let’s take a look at some of the simple tips a small business owner can use to reduce their risk.
Prepare for business interruption
Unforeseen events ranging from fires to cyber-attacks can prove to be a serious interruption to your business. It’s crucial to prepare for the kinds of losses these interruptions can have in the short and long term.
Design a disaster recovery plan that details procedures for data backup and recovery. Make sure you have plans for a remote working locations and a way to inform employees of the changes.
Consider an investment in interruption insurance so that you can continue to pay staff and offset operating costs while you replace crucial equipment, workspaces and data. Insurance plans can usually cover you for up to a year of lost revenue, giving plenty of time to recover from most incidents.
Prepare for injuries
Depending on the type of business you run, employees may be at risk of injury while they work. It’s important that you educate employees on proper safety and make sure that you have a workers compensation insurance scheme in place.
This kind of insurance covers the lost wages and medical costs for employees who suffer an injury as well as protecting you from legal liability.
Data loss or data theft can be devastating for a business that is not prepared for it. Whilst having a plan for data backup and recovery make sure you have protections in place against cyber-attack.
Make sure that you and your employees are educated on common cyber threats such as phishing emails, Trojan programs and using the same password across multiple devices.
Consider an investment in identity recovery and data compromise insurance which can help protect from losses in relation to data loss and identity theft.
Carefully consider all contracts
When you’re a small business looking to expand, long-term contracts can seem appealing as they guarantee a certain rate. This can be dangerous, especially for lease contracts as depending on your business performance you may not need all of the extra space you are paying for.
Be careful not to get locked into a long-term agreement that you can’t sustain. Always read contracts carefully and compare them with your own business predictions. This is where the services of a commercial lawyer can be particularly useful for you.