Small businesses must face a variety of risks if they want to stay in business. Almost a quarter of all small businesses are adversely affected by risks they were not prepared for. Different businesses have different types of risk. However, some types of risks apply to all small businesses. Knowing which small business risks are most likely to affect your business will allow you to take appropriate steps to avoid them.
External risks of small business
There are many external risks that can be very harmful. General liability claims resulting from slip and fall accidents or product/product malfunctions can be financially devastating. There are many external risks that cannot simply be avoided. While you can mend your sidewalks and do your best to provide quality products and services, your best protection is a quality commercial insurance policy. A good commercial policy will cover damage to your property as well as most general liability cases. It can even cover a business if operations are interrupted due to a natural disaster or other unexpected event.
Many internal risks come from your employees. A work-related accident or alleged case of discrimination can lead to lawsuits. Employee theft is also a problem. Small businesses with a few employees face the same risk as larger companies. The only difference is that the risk increases with the number of employees. The best way to avoid many of these HR risks is to implement a zero-tolerance policy for all employees. Violations of company guidelines will result in immediate termination of business.
Almost every small business uses some type of computer program, either for inventory and business management or for financial management. It only takes one email and a suspicious attachment to ruin your business financially. A cyber attack can compromise your commercial records and damage your company’s reputation. Installing an antivirus program is only the first step. Backing up your information to an external hard drive will protect it from being lost or damaged in any way.
For a small business, reviews can make or break you. Good reviews are a great way to increase business. On the other hand, bad reviews can drive people away. Another way to quickly damage your reputation is through poor customer service. Inefficient products and poor workmanship also damage your reputation. With feedback, you can use feedback to improve your business. Good customer service is a must. Take a few minutes and review all the areas of your business where you’ve experienced negative feedback. Use this information to improve your business across the board. Small business risk mitigation is an important part of any business. Know your risks. Learn how to fix them. Take proactive steps to improve your company at all levels. While you will always face some degree of risk, there are ways you can protect both yourself and your business. Controlling your risks will help you improve your reputation and keep your business growing.