No business is immune to risks. Even business owners with a very detailed and well-thought-out business plan won’t be able to account for the risks that may come their way. But that doesn’t mean they should come unprepared anyway because business is all about strategizing and planning.
If this is your first rodeo ride in the industry, it might help you learn about the common risks that small-business owners face and what they often do to solve them. By researching the risks you might encounter along the way, you’ll be better prepared for when it happens to you first-hand.
Many of the risks that small-business owners face happens right under their noses, mainly because they don’t believe that these things can happen to them until they do. These personnel-related incidents can include workplace injuries, employment issues, or embezzlement of funds.
Injuries caused by an unsafe work environment or dysfunctional equipment can cost money and lives in the process. And you might not have the resources to pay for those kinds of damage without putting your business’ cash flow at risk. That’s why it’s crucial to have insurance coverage.
But injuries aren’t the only incidents that can happen inside the workplace. If you don’t have the best employees, there’s a possibility that you’ll deal with embezzlement of funds, even if you’re still a small business. Having a third-party auditor can take care of this problem and keep your employees in line.
If there are internal risks, then surely there will be external risks. In business, external risks refer to the kind of troubles that are beyond your control. This can include damage sustained during natural disasters, complaints by unhappy customers, property damage and theft, or industry-related problems.
The damage you sustain during a natural disaster can be hard to bounce back from, especially if it affected your inventory and in-house equipment. That’s why it’s good to have a business continuity plan to prepare for such events since there’s no way of telling when a natural disaster will strike.
On the other hand, if the damage to your property is caused by vandals or thieves who broke into your warehouse, then you’ll need to press charges against them. But that’s only if you can catch them in the act. If you believe that your property is vulnerable, then it can bode well for you to hire security guarding services to ensure the safety of all your assets.
Aside from the physical risks that happen outside of your business, there can also be risks to your reputation and branding. This is especially true in the age of social media because it’s so easy to disseminate information through the channels, even if they aren’t accurate or correct.
To address this, you can monitor the conversations about your brand online and actively participate in the discussions. You can also ask for both positive and negative feedback from customers, which can help you pinpoint your areas of improvement. Through this, your customers will see that you’re willing to improve your products or services.
But your customers aren’t the only volatile factor in the success of your business. It’s also possible that the developments in your industry can affect your operations. Of course, there’s no definite way to foresee the future, but doing thorough research may help you prepare your business for what’s to come. At least this way, you can anticipate the trends, developments, and changes happening in your industry.
Lastly, the most prominent risk in the digital age—cybersecurity. More than half of the small businesses that experienced a security breach shut down within six months of the attack because they couldn’t deal with the financial losses or the damage they sustained from the incident.
Cyberattacks are no laughing matters because they can be devastating for businesses that have no service disruption protocols in place. Losing even a day’s worth of data can be a setback for most companies, so you can only imagine how damaging it would be to lose your sensitive data all at once.
To address this, you’ll need to have high-level cybersecurity protocols and strategies for monitoring online activity. Prioritize your risk management from the start so that you can easily bounce back from an attack, particularly because you were able to minimize the impact of a data and security breach.
By mitigating the risks your business may face in the long run, you’re greatly reducing the damage you will sustain over time. No business comes without risk. But being able to preempt the risks and devise strategies to solve them can help you stay in business for a long, long time.