For the intrepid entrepreneur, starting a small business can be a rewarding and fulfilling adventure. Among many of the ways to describe small business ownership, however, the word “easy” would not usually be present. Small business ownership comes with risks. The good news is that these risks can be manage. You just need to be aware of them and plan accordingly.
Common Risks Small Businesses Can Face
There are various categories of risks that small business can face. This can be daunting, but the anxiety and fallout of these risks can be effectively managed through proper planning and putting the appropriate legal protections in place. Consider, for instance, external risks to the business. This can include everything from natural disasters to customers who delay in paying invoices. The external risks can feel largely out of the control of a business owner. You can manage external risks by planning for them. Worried about natural disasters or your facility being damaged? Make sure you have proper insurance coverage and, if you are renting, review the terms of your lease. Slow paying customers? Make sure your invoicing and collection procedures are clearly set forth and streamlined as much as possible.
There are also a significant number of internal risks a small business can face. Employment related disputes can ruin a business’s reputation and bring operations to a crushing halt. Disgruntled employees can sue the business alleging unfair treatment and leading to costly and prolonged legal proceedings. Partnership disputes can also prove an expensive and destructive force in a business. To help manage internal conflicts, make sure your company policies and employee handbooks are detailed and address things like how disputes should be handled when they arise, what happens when a partner wants to split from the business, what everyone’s roles and responsibilities to the company are, and much more.
In this age of rampant technology, it is also a reality all business owners need to face that data can be at great risk. Companies big and small store all sorts of customer and business data. Protecting that data can be achievable and manageable. You just need to be sure that your cybersecurity protocols are up to snuff. This can include everything from firewalls, to regularly changing your passwords, to using two-factor authentication for messaging platforms and email login.
On top of all of this, there are risks to a business’s reputation at every turn. This can be the result of any of the other risk types, such as an employee suing the business, a disgruntled customer, or a data breach. While there are likely to be bumps in the road for your business, swiftly addressing them can manage the fallout to your reputation. Bad online review? Respond to all of it in a professional manner. Always respond to the customer feedback you receive whether it be the good, the bad, or the ugly and do so in a timely fashion.
Business Law Attorney
The Kumar Law Firm is here to help you on your small business journey. Yes, there will be risks, but we are here to help you manage them so that your small business can continue to grow and thrive. Contact us today.