No business has clear skies all the time. Even the greatest ideas or products have had bumps in the road along the way. It is how businesses manage those potential issues that makes the difference between successful businesses and those that can’t get off the ground.
Make sure that you assess possible business risks and have plans in place for them. Here are a few of the possible risks and how to handle them.
Property Damage or Loss
Depending on the business, specialized equipment may be necessary. No matter how carefully you think you are with that equipment, there is always a chance that it could be stolen or broken. That’s not even covering intellectual property, which is not physical.
That means having contingencies in place in the event that things are either stolen, damaged, or broken. It may result in additional upfront costs but those will be nothing compared to having to replace said equipment at a moment’s notice.
Even the best laid plans face the risk of failure. Whether that means not finding clients right away or not getting the ROI that you anticipated, financial risks are one of the biggest threats to a business.
That is why it is imperative to have contingency money wherever possible. Having money for unforeseen issues can mean the difference between life and death for some businesses. A whopping 82% of businesses in the United States fail because they have mismanagement in cash flow.
Illness, Injury, and Loss
Whether self-employed or running a team of your own, one of the biggest potential risks is illness or injury to a team member. For those who are self-employed, there would be no one to pick up the slack and do the work. In a team setting, you not only lose production but could also be facing potential legal issues.
There have to be plans in place for events like these. In a team setting, insurance is also a must to protect from legal liability.