As with many things in life, there is some risk involved in owning a small business. However, you can take precautionary measures to avoid some of these risks. By focusing on risk reduction, you may never have to deal with some of the uglier sides of owning a small business. Instead, you can enjoy watching your business grow and thrive.
Here are some common small business risks and how you can best avoid them:
1. Liability: Make sure you have proper insurance.
It’s important to have the right insurance so if there is a case where you are possibly liable, your business is safe. The Small Business Chronicle states: “Transfer risk to insurance companies by insuring against major risks such as damage to your facilities, product liability, injuries to customers or suppliers and death or incapacity of company principals.”
2. Product: Implement good quality assurance.
By ensuring your product is safe and up to your standards through rigorous testing and quality assurance checks, you’ll develop a better reputation and repeat customers.
3. Credit: Check business credit.
With the help of credit report companies, you gain valuable insights on your vendors and clients. You don’t want to be in a situation where you’re not getting paid, and by being aware of a company’s credit situation before doing business with them, you decrease your risk. Look to Credit.net for help here; we provide small business credit reports and other important business data.
4. Credit and History: Keep accurate records.
This will reduce your risk of finding any surprises or losing information that you should have kept. From accounts receivables to past history with customers, you’ll want the most accurate records possible to avoid any unnecessary future problems.
5. Internal: Keep accurate checks and internal controls.
You can’t do everything on your own, and you can’t check all of your employee’s actions all of the time. But you do need a measure of control. Different internal controls, from who has access to finances to who signs what will help keep things manageable and reduce risks.
Forbes recognizes that though business owners are quite optimistic, this optimism can often result in risk. You need to make sure that you see things clearly, make smart decisions and call help when needed. Credit.net can help you make those smart business decisions.
With an extensive database with information on over 15.5 million U.S. and Canadian businesses, Credit.net has valuable data that you can use to evaluate the stability of your clients, vendors, and prospects.
Owning a small business is risky. However, living your dream and watching your business thrive is worth it. Just be aware of the risks and how to avoid them as best you can. Please contact us at Credit.net to see how we can help you on this road.