On Solid Ground: 8 Ways Business Owners Can Mitigate Risks

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Negosentro.com | If you are running a business there are plenty of exciting opportunities ahead of you and almost as many challenges and risks that you have to manage.

The way forward is about growing the business while having strategies in place that identify and mitigate against the sort of risks that can easily derail your progress if you do not have anything in place to protect your company.

One example of mitigating risk would be arranging general liability insurance now at EINSURANCE so that you do not have to face a potentially expensive lawsuit without some protection against the cost of that action.

Here is a look at some of the ways to manage certain risks that could impact your business.

Have a backup plan

If you had to list the risks you face in business in order of importance it is likely that protecting your data would be near the top of that list.

Good record keeping and having a backup of your data could prove to be a savvy move when you are faced with a scenario where your information would be lost completely without that layer of protection.

Details of your transactions, sensitive financial data, and all sorts of critical information needs to be protected, and a good way of doing that would be to arrange secure cloud storage so that you always have a backup when you need it.

You have got it covered

Running a business presents a unique set of challenges when you are dealing with customers and suppliers while trading from premises.

Accidents and injuries happen every day in the workplace and if your business doesn’t have the right insurance coverage you could be facing a financial liability that could cripple your business if damages are awarded against you.

If you have cover in place such as general liability insurance you will have the protection you need to deal with a claim if someone is injured on your business premises or issues a lawsuit for a number of other issues that could be expensive to deal with without insurance to soften the blow.

Maintaining standards

Your business will have a good chance to thrive if it develops a strong reputation for maintaining a high level of quality control.

Good quality control applies across a range of business disciplines and if you have systems in place that ensure you maintain high standards from the goods you supply to the level of service you provide it can prove highly beneficial to the success of your business.

You don’t want to risk developing a poor reputation for service or quality and complaints are often bad news, especially in a social media age, which is why it is essential to implement strategies that allow you to maintain high standards throughout the business.

Good employee training

As your business grows you will become more reliant on employees to help you manage all the tasks and actions that need to be taken on a daily basis.

This is the reason why it is essential that you think about ongoing training and personal development for all employees and making them aware of the risks they face and how to mitigate against them.

A good way to do that would be to create an employee handbook and have an induction scheme that helps to ensure that everyone is in line with your code of conduct and ethical standards from day one.

Review your work practices

It is also well worth talking about the importance of having solid pay and working practices within your business.

Legislation changes constantly and issues such as gender equity laws could prove troublesome to your business if you don’t have fair policies in place.

Understanding your responsibilities as an employer will help deal with the risk you might face if you are accused of not paying someone correctly or treating them fairly.

Keep employee agreements up to date

It is essential that every employee signs an employment agreement once they have completed their probationary period and become a permanent part of your workforce.

A good suggestion would be to use a professional who can draft a robust contract of employment that covers all the bases.

In addition, it makes sense to review this agreement on a periodic basis to reflect changes in employment law and adjustments to the employee’s remuneration package and duties.

Maintain confidentiality

Your business will have information that you will want to keep within the organization and that means you need to have a system in place to keep sensitive and confidential data safe from unauthorized sharing or disclosure.

You will need to consider using restrictive covenants as a way of protecting sensitive and confidential business information that could be damaging to your reputation and trading success if released to a wider audience.

Implement enforceable confidentiality and non-compete agreements so that all employees have a legal duty to keep what they know within the business at all times.

Manage your cash flow

Every business needs good cash flow in order to survive and prosper.

If you don’t have a good cash flow management system in place it could place your business at risk of not being able to fulfill orders, pay employees, or even continue to trade, when the situation becomes critical.

Good cash flow management starts with an accurate budgeting and business plan that you can follow so that you know how much you are owed and how much you owe at any point in time.

It would also be a good idea to have a contingency plan in place and access to emergency funds if you hit a temporary cash flow problem, which can easily happen if a customer is late paying you, or doesn’t pay you at all.

Don’t underestimate the importance of good cash flow management as money in the bank is the oxygen that allows your business to trade successfully.

If you can mitigate these and other risks as part of your business plan it should help you to focus on going forward with the peace of mind that you have it covered if you hit a bump in the road along the way.