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7 Tips for Reducing Risk at Your Small Business

Small business owners have their work cut out for them. Running your business probably means you have to fill the shoes of many different roles, from handyman and cashier, to accountant and marketing team. Or maybe, you have some support and you’re able to delegate these responsibilities so you can work to grow your business. Regardless of where your time is most frequently spent, you likely want to avoid risk as much as possible to keep your small business running smoothly and, more importantly, making profits. After all, you’re not likely to make profits if you’re constantly dealing with the fallout of risks. Instead, try these seven tips to reduce the risk to your small business.

Remove Potential Obstructions and Dangers

One of the first ways you can reduce risk is to remove potential physical risks in your workplace. This may seem obvious, but a little cutter can be easy to overlook when you’re caught up in the day-to-day activities of running your business. Save yourself some headache and make the effort to leave walkways open and uncluttered. Eliminate any hazards on shelves or in customer-facing areas. Fix any broken equipment or maintain your building. You bear a certain level of liability and being smart with your spaces can make sure you don’t find yourself on the unfriendly side of a lawsuit.

Get Insurance

Yes, insurance is an absolute must. While budget is always a concern, having the bare minimum may not be the wisest choice. We know you may sometimes need to make tough financial decisions, but insurance is your safety net if and when times get tough and it’s not the right place to cut corners. You may want to consider the following upgrades to your insurance.

  • Business income insurance
  • Commercial property insurance
  • Professional liability
  • Worker’s compensation
  • Data breach
  • Health

Be Smart with Your Finances

Money is always a consideration with small-business owners. While it’s often a smart business decision to grow your business, making unwise investments or committing to long-term financial agreements may not bode well. As a small business owner, you need to consider the possibility that things could become financially unstable rather quickly and you may need some cash to keep things running in the event of an unexpected situation.  

Have an Emergency Plan

Put on your pessimist hat and consider the worst-case scenarios. Maybe a tornado strikes without warning or you suddenly have to deal with an unexpected divorce or personal illness. Smart business owners are prepared for reasonable risks and emergencies. Have a plan for keeping things running in the worst of situations, including who would make decisions and where interim finances should be used. Make sure you have considered tough scenarios and you’ve got a working plan for emergencies.

Be Wary of High-Risk Customers and Employees

Sometimes, the problem lies within. That’s a very ominous way of saying that not all employees and customers are going to be great for your business. If you notice questionable behavior or giant red flags, it may be time to move on from an employee or a high-risk customer. Take measures to remove the risk that people pose to your business and make yourself more immune to problems.

Having said that, make sure you are also following employment compliance when dealing with employees.

Use Technology Wisely

Technology can be a great asset, whether it helps make easy work of accounting or it stores and tracks all of your inventory. But, it can also create some potential risk for your business. You need to make reasonable efforts to protect customer information and guard against potential cyberattacks. This may involve doing things such as the following:

  • Using strong passwords: Okay, okay, you’ve been told a hundred times to make sure you have strong passwords, but it really is a significant deterrent for cyberattacks. And don’t leave it on a piece pf paper next to the keyboard (please).
  • Installing virus protection: Make sure you have basic virus protection software. This may seem like a no-brainer, but this isn’t a step you should skip. Your business may rely on it, so be cautious and smart.
  • Updating your technology regularly: Anyone who has ever owned a smartphone likely knows the value of technology updates. If you don’t update it, it doesn’t work well and small issues can later become big problems. Make sure you do the updates when you’re prompted.
  • Being smart with employee access: Not everyone needs to have admin-level access to your accounting software. Make sure you only give the necessary employees access to what is needed and make sure to immediately remove said access if an employee leaves or is terminated.

Plan for Physical Security

While technology risks are by no means insignificant, you also need to plan for physical security. Physical security is a real concern for many small businesses and you need to plan for it. Make sure you have alarms installed and take extra measures to secure your property (or properties) against possible threats or nefarious actors. Cameras are also a helpful deterrent and can be helpful in the event of an insurance claim or police report. Not all risks are avoidable, but taking small measures towards lessening what you can will only help to improve your business. If all else fails, we’ll be there to help. Find out more by speaking with a licensed PCIA agent today: (877) 927-6579