Research published in Forbes found that only half of the new businesses that are started each year survive their first five years. Since getting a business off the ground and making it a success takes a lot of hard work, the last thing any business owner wants is for a threat to derail their success. However, the competitive nature of business means there are quite a few threats that can do just that. While there’s no way to completely eliminate those threats, the good news is there are plenty of steps you can take to protect your business from them.
In order to protect your business, you first have to understand which threats are the most serious. That’s why we’re going to cover the most common threats, as well as why can be done about them. So without further ado, let’s look at how to protect your business from:
A common misconception about business structures like a LLC is simply creating this entity will fully protect a business during a lawsuit. In reality, while a formal structure can help, it’s not a guarantee. Since you can’t magically stop lawsuits, it’s a very good idea for businesses to have additional protection. General business liability insurance is the most common form of protection that companies of all sizes utilize. In most cases, this type of insurance will cover the costs associated with defending and/or settling a lawsuit. Just be aware that there are things this insurance doesn’t cover. Auto related incidents, professional mistakes and employee injuries are all scenarios that require separate forms of insurance.
Out of all the threats to businesses, a man-made or natural disaster is the one that’s most often overlooked. However, just because businesses don’t think they’ll be affected by one doesn’t mean they’re safe. A poll conducted by the NFIB found that 10% of small businesses have been negatively impacted by a man-made disaster, while a full 30% have been struck by a natural disaster. Because that’s a significant number, it’s worth taking the time to formulate a disaster plan, as well as to secure any necessary insurance.
Many new entrepreneurs are extremely concerned about having their idea stolen. In fact, they’re so worried about being ripped off that they don’t share their idea with anyone. Instead, they toil away on it for months or even longer in complete solitude. The problem with that approach is even though someone thinks they’re protecting an idea, the reality is they may be working extremely hard on something that’s just not that great of an idea. While they’d find that out quickly if they shared it with others, keeping it to themselves results in a lot of wasted time.
The reality is while patents can be a useful tool, when an idea is in its early stages, there’s really nothing to stop someone from ripping it off. That being said, this type of theft almost never actually happens. The reason is most people have lots of great ideas. However, there’s a big gap between having an idea and executing on one. So when you have an idea you think is solid, don’t be afraid to discuss it with others for validation. And if you discover they also think it’s a winner, the best thing you can do to protect that idea is get the ball rolling.
Although it’s great that businesses can order refills like cartridges of ink and toner online, it’s important to keep an eye on your supplies, inventory, cash and other assets. Because employee theft is a serious problem across all industries, you shouldn’t think twice about using measures like security cameras to prevent this problem. Being assertive as an owner actually helps employees because it means they won’t have to worry about any unjustified suspicions arising about what they’re doing.
Thanks to all the physical and cloud backup options that are available, this should be the easiest problem to prevent. Unfortunately, far too many businesses still lose important data that they aren’t able to recover. Since it’s easy to forget to run manual backups, the most effective data loss prevention solutions are ones that run frequently and automatically.
With this knowledge, you can take the necessary steps to protect your business. And while there’s still a good chance that you’ll eventually have to deal with at least one major obstacle, taking these preventative measures will put your business in the best position to successfully get past them.
Michelle Milian specializes in loss prevention. She helps businesses of all sizes protect themselves. This results in significant savings of both money and resources.