Reducing Business Risks
Today small businesses face more risks than ever before. Dramatic weather changes, natural disasters, crime, changing regulations, and worldwide economic and political unrest can have a devastating impact on your business. While it’s impossible to eliminate risks, it is possible to reduce their negative impact by taking some simple measures:
- Make sure you purchase enough insurance to transfer the responsibility for losses to your insurer, considering property replacement value. Make sure you understand what is and is not covered. Periodically review and update your property values and adjust coverage accordingly.
- Protect your business property and equipment by installing an effective safety alarm system, automatic fire-hazard sprinkler system, fire extinguishers, and other safety measures.
- Implement a comprehensive safety awareness program within your company. Train employees on ways to make their workplace a safer environment.
- Perform any necessary maintenance on your business property and equipment in a professional and timely manner.
- Backup important data regularly to a separate facility. Implement firewalls and other measures to secure sensitive information.
- When needed, make sure you have emergency power generators, as well as surge protection and backup for your computer system.
- Trademark your brands and sub-brands. Secure the necessary domains to avoid having to duplicate branding initiatives and/or face costly lawsuits.
- Transfer risk to the customer. Be sure to provide clear and detailed written instructions about the proper use, precautions, and characteristics of your products, as well as necessary disclaimers when needed. Also, pay careful attention to your warranties to make sure they are designed to protect you.
- Lease business property and equipment instead of increasing your fixed-asset inventory.
- When possible, request vendors and suppliers to store merchandise and raw materials at their warehouses until needed.
- When possible, request vendors to ship merchandise directly to your customers, thus avoiding the liability that can occur during transportation.
