Small businesses must deal with a variety of risks if it wants to remain in business. Almost one quarter of all small businesses are negatively impacted by risks they weren’t prepared for. Different business have different types of risk. Some types of risks, however, apply to all small businesses. Knowing which small business risks are most likely to affect your business will allow you to take appropriate measures to avoid them.
External Small Business Risks
There are many external risks that can be quite damaging. General liability claims that result from slip and fall accidents or product/workmanship failure can be devastating financially. There are many external risks you can’t simply avoid. While you can fix your sidewalks and do everything you can to provide quality products and service, your best defense is a quality commercial insurance policy. A good commercial policy will protect damage to your property as well as most general liability incidents. It can even cover business if operations are interrupted due to a natural disaster or other unexpected event.
Internal Risks
Many internal risks come from your employees. A work-related accident or an alleged discrimination incident can result in lawsuits. Employee theft is also a problem. Small businesses with only a few employees face the same type of risk as larger companies. The only difference is that the risk increases along with the number of employees. The best way to avoid many of these Human Resources-related risks is to implement a zero-tolerance policy for all employees. Violations of the companies guidelines will result in immediate termination.
Cyber Attacks
Almost every small business runs some type of computer program, either for their inventory and business operations or to manage their finances. It only takes one email and suspicious attachment to destroy your business financially. A cyber attack can compromise your business records and damage your company’s reputation. Installing anti-virus program is only the first step. Backing up your information to an external hard drive will protect it from being lost or corrupted in any way.
Damaged Reputation
For a small business, reviews can make you or break you. Good reviews are a great way to boost business. Bad reviews, on the other hand, can chase people away in droves. Another way to quickly damage your reputation is to provide poor customer service. Ineffective products and workmanship are also damaging to your reputation. With reviews, you can use the feedback to improve your business. Good customer service is a must. Take a few minutes and go over all the areas of your business where you have experienced a negative backlash. Use that information to improve your business all the way around. Mitigating small business risks is an important part of any business. Know your risks. Learn how to correct them. Take active steps to improve your company on every level. Even though you will always face some degree of risk, there are ways you can protect both you and your business. Taking control of your risks will help you improve your reputation and keep your business growing.
