Entrepreneurs tend to be an optimistic lot. Of course, one has to be in order to be successful in business. With that said, it’s always a good idea to balance that optimism with a bit of pragmatism. After all, there are several financial threats your small business may face. Being ready for them going in will save you a lot of headaches — and expenses.
With seemingly everyone with any knowledge of coding at all going rogue and invading every vulnerable system they come across, this is a big one these days. OK, that’s a bit of an exaggeration, but the reality is there are people out there willing to work harder to steal than to build.
You’re going to be at risk for an incursion if your venture requires the storage of sensitive data. This is something you should think of as a “will happen,” as opposed to a “might happen.” Doing everything possible to ensure the security of your data systems is paramount.
Perform software updates as soon as they become available. Run tests from time to time to probe the ability of your systems to ward off interlopers. Carry cybersecurity insurance to cover you should your security measures become overwhelmed.
Regardless of how benign your industry might be in terms of the potential for physical injuries, they do have a way of finding your people just the same. Even the tiniest paper cut could morph into an infection and leave your assistant with a full-blown workplace injury.
Guess who’d be responsible for the financial aspects of setting it right? Yes, you. Aside from their physical health, you need to be concerned about the mental well-being of the people you employ as well.
Stress-related incidents are increasingly common. You’ll need to provide proper training and care, along with flexible working options for the people in your employ. You’ll also need to carry a worker’s compensation insurance policy.
Every year as summer turns to autumn; the eastern seaboard comes under the threat of hurricanes. Out west, earthquakes and fires are constant perils. Then there is always the possibility of the unexpected, with gun violence and terrorism becoming more rampant. Any of the above could knock your operations offline.
An extended cash flow disruption could well mark the end of your endeavor. You’ll need backup measures in place should your offices become uninhabitable or key equipment becomes incapacitated. In addition to an alternative operation plan, you’ll do well to carry business interruption insurance to keep you afloat while you work to get your ship back under power.
Loss Of Key Personnel
People are mobile creatures. They came to work today, they came to work yesterday, but there’s no guarantee they’ll come to work tomorrow. People move, change jobs, experience life changes — and they pass away.
If this is one of the only two people who really know how to do what needs to be done to generate the bulk of your revenue, you’re going to be hobbled for a while. It’s best to cross-train as many people as possible, so any person can move into another area and at least be competent, if not proficient.
Preparation Beats Regret
We know looking at your business from this perspective might well smack of cynicism. After all, the chances of many of these things happening are slim. However, the possibilities do exist. A strong general liability insurance policy is an excellent addition to your arsenal of defenses.
While it won’t cover every possible situation, it will cover many of the most common, like bodily injury and property damage to others. Further, it’s far better to look ahead and institute proactive measures to mitigate financial threats your small business may face than it is to adopt a reactive posture in which you’ll “deal with it if it happens.” Preparation is always better than regret.
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