Business is like a game of Monopoly. One minute you’re riding high and the next the Chance card is telling you to go to jail without passing ‘Go.’ There are some things that you can’t foresee, but others you can prepare for. In a bid to safeguard your business against financial ruin from the unlikeliest of causes, consider the following as life jackets that will keep it from sinking if the unexpected happens.
Assess risks
Risk assessment from a health and safety perspective can prevent accidents. For businesses, risk assessments help you to identify potential threats that you can mitigate with the right controls. Before launching any project or undertaking an expansion or drastic decision, assessing the risk could be the factor that decides whether you fail or success. Risk analysts are commonplace in major financial businesses, and their approach to assessing risk could benefit you too.
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Insurance
If your business employees anyone insurance is a must. Even sole traders or small business owners should consider getting business insurance. Not only does having insurance show that you are serious about your business but it also helps by covering you against property damage and any potential liability from a customer or a client. You should revise all types of business insurance available to make sure you’re covered against all possible outcomes that could devastate your business.
Legal help
Business lawyers are essential for registering your business and helping to get it off the ground. They are also vital for managing contracts between employers and employees or suppliers and clients. Other ways you may find yourself needing legal help include facing a personal injury lawyer should an employee or a customer decide to make a claim against you. Lawsuits and legal action can be taken against anyone from a contractor to a large corporation, so it’s best to be prepared for whatever is lurking around the corner. Forming a good relationship with your lawyer will make them an asset to your business that can be relied upon to help you avert a crisis.
Internet security
If you’re a business that operates online or even uses online systems, internet security is a critical business need. It’s important that you make your website a safe place for those who access it and your systems also need to be protected. It’s estimated that $400 billion is lost because of hackers each year, a risk your business cannot take. Having someone steal your customer/client data is one thing, but the reputational damage can be the thing that causes people to lose faith in your company and see your profits nosedive. It’s something you won’t want to scrimp on and will become a growing concern as hackers become more sophisticated in their methods.
A marketing team that knows what it’s doing
Internet fraud and hackers are one thing, but business losses could occur from a fault within the walls of your organization. One false marketing move and your reputation could be damaged in a blink of an eye. Where social media is concerned, where public falls from grace spread like wildfire – the damage caused to your business through one misguided tweet or Facebook post could be catastrophic. To sit alongside your marketing team, a communications or PR team to manage any crisis communications could dig you out of any holes that happen because of an error in judgment. As well as a capable and experienced marketing team, you should also put social media policies in place that employees must adhere to so that public mistakes can be avoided.
Investments and contingencies
If your business were to suffer significant financial losses due to a poor performing quarter or as the result of a wider financial crisis, could you survive? Safeguarding your business by investing when the profits are up and setting aside contingency funds can help you to cushion the blows. Doing this will mean that you won’t need to rely on credit and also allows you to take some risks from time to time. Good relationships with your bank and accountant can help you foresee issues before they become full-blown problems.
In business, nothing is certain. Even the largest of businesses can be affected by unexpected events, and those that suffered during the global financial crisis can teach you some valuable lessons. By doing all you can to protect you and your business from risk, you’re managing your finances better and safeguarding your assets. From the legal requirements to the smaller considerations you should take on board, being prepared is better than being caught off guard.
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