Businesses are always at risk to a wide array of complications - digital, financial, and legal, to name a few. Many of these risks are part and parcel of being in business, but that doesn't mean they can't be reduced or even eliminated. The first step in protecting your business is identifying what kind of threats your business faces. So, without further ado, here are five variables that could be detrimental to your company and tips on how to prevent them:
1) DATA BREACHES
It is absolutely imperative nowadays that you protect your networks and company data. Employees, partners, and customers rely on your business to safeguard their information. Without strong cybersecurity measures in place, their data - and yours - are at risk. This can create various operational, financial, and reputational problems that no business wants to be subjected to.
To remedy this, Nancy Howard shared tips on how you can strengthen your cybersecurity. Simple things like updating your software and implementing stronger authentication often go overlooked, but they do wonders for data protection. It is also wise to hire dedicated cyber professionals from companies like Techvera to help craft and implement cybersecurity policies to protect your business's interests.
2) PROPERTY DAMAGE
Property can be anything from a wall in your office to your work computer. And damage to these items can be a huge financial burden and legal liability to your company and its earnings.
To protect it, start by writing a complete list of your business's property, and develop a plan on how to deal with potential property damage. One way to go about it is to apply for insurance. The Balance writes that there are multiple insurance policies that business owners can apply for to cover property repair costs. For instance, general liability insurance applies to a wide array of third-party insurance claims, while commercial property insurance specifically covers damage to your business's property caused by unexpected events.
3) LEGAL LAWSUITS
Legal liabilities can be time-consuming and costly. It can put a stop to operations, drain your finances, and tarnish your company’s reputation. And with a single misstep, business owners could be forced to pay thousands of dollars in legal fees out of their own pocket. This is very much the case for businesses without formal legal structures, particularly proprietorships and partnerships.
One viable solution is to establish a limited liability company (LLC). According to a ZenBusiness article on forming LLCs, this particular business structure creates a clear demarcation between business assets and personal assets. Because of this, owners are not personally responsible for lawsuits filed against the company, and they won't have to shell out capital to pay legal fees. Another solution is to apply for liability insurance. This type of insurance protects your company from any claims against negligence from your clients.
But of course, avoiding lawsuits is not only a matter of setting up a formal structure. Consider obtaining legal counsel to ensure that your business is always in compliance with rules and regulations, which can oftentimes be complex.
4) POOR EMPLOYEE RETENTION
Employees come and go, but a high turnover rate can be disastrous for your business. This means having to devote more time to finding new talent and training them for the job.
The solution here is to cultivate a healthy working environment for your employees. This entails setting expectations, offering competitive pay and benefits, and treating all your employees with respect. After all, if your employees are happy working for you, they're more likely to stay and perform well on the job.
And while it is unavoidable that some people will eventually leave, you should still have an effective recruitment system in place, and an exit strategy for outgoing employees. HR Daily Advisor recommends letting the employee who is transitioning out train the one taking their place. This way, the new employee gets firsthand knowledge of their new job. It also puts less stress on you to train your newly hired workers.
5) BUSINESS INTERRUPTIONS
Anything from a typhoon to a fire could grind business operations to a halt. But if this occurs, you'll still have bills to pay and employees to compensate.
Building an emergency fund early on can keep your business afloat, at least for the first few months of the interruption. However, interruptions could last for a long time, especially now that there's an ongoing pandemic. So, you need to be aware of any available relief options. Apart from the policies put forward by the CARES Act, there are also funding programs provided by the Small Business Administration. These can help your business push through the toughest crises.
Aside from the financial aspect, you should also train your employees to be adaptable. They should, for example, be ready to shift to a remote working schedule should the need arise. Such preparations help you pivot when faced with even the most challenging of times.
These are the biggest threats that your company might have to face. Luckily, there are plenty of available measures that prevent them from happening or to, at least, stifle their adverse effects.