When you’ve invested so much into building your small business, you can’t risk throwing it all away. Of course, there are risks everywhere in business, and you’re going to have to take many in your career.
How easy do you think it is for a business to fail? We’re not talking about a small slump in the market. We mean a disaster that causes your business to shut down and for you to have to file for bankruptcy. We imagine you think that, while there is a possibility of this happening, it can’t be caused by one mistake. But it can. If you don’t bother getting the protection your business needs, one bad lawsuit could easily end your business. There are a number of different types of legal protection you will need when running your company.
But you can always take measures that will protect your company when you wade into risky waters. Follow this quick guide to make sure you’ve got the right areas covered properly.
Understand financial risks
In the world of business, basically every single financial move you make carries a lot of risk. For many people, the ways to avoid risk can seem obvious. Quite often, it boils down to one of two options. Investors will avoid risk by not making the investment altogether. Or they’ll make the investment and chalk the risk up as a business necessity.
But in every scenario, you should be looking to reduce financial risk as much as possible. You can look into having an in-depth conversation with a financial advisor. Preferably, it will be someone who works independently from the transaction you’re looking to make. But perhaps the best way to deal with this situation is to educate yourself about the types of risk that are out there.
It’s a must that you get as clued-in as you possibly can on how the technology you use works. Businesses are now largely built on the power of computers and the Internet. But so many business owners aren’t educating their employees (or themselves!) enough about the tech they’re using. You should do everything in your power to make sure this isn’t the case. For example, the importance of Internet security must be made clear to every single employee.
If something does go wrong, then you need to be prepared to launch an in-depth computer forensic investigation. That might sound like some strange new version of CSI, but it’s actually an essential component of tech-heavy businesses. If you’ve suffered data theft or threatening communication, then it’s essential. It’s how you’re going to track down the source of the problem!
This one is rather important if you are creating new and original products designed from your own concepts. If you want to make sure that no one else can copy your designs, you need to get them patented. If you don’t, you will quickly find copycat companies on the market in no time at all.
Imagine if Apple had not patented the design of the iPhone. There would be hundreds of them on sale from different companies under different names. The iPhone wouldn’t be able to sell at anywhere near the obscene price that it does. This is all about patenting. So, if you have a product you’re thinking about introducing into the market, get it patented as soon as you can. They will be able to explain everything you need to know about this form of protection.
What are the chances of your business being affected by a natural disaster? We would hope slim to none. But obviously it depends on where your company resides. If your main offices are situated in California, we imagine you would want some form of protection against earthquake damage. Even if your business is in London, you probably want to make sure you’re covered for flooding. And let’s not forget about fires! Obviously a fire isn’t usually going to be caused by a natural incident. You would also hope your sprinkler systems can sort it out before damage occurs. But sprinkler systems have been known to fail, so it’s better to be safe than sorry.
Talking about insurance is never fun. Ever. Only odd people find insurance fun to talk about and get involved in. Unfortunately, you’re going to have to do it. After all, setting up your business couldn’t have been cheap, right? Remember that any change in your business will necessitate a change in your insurance policy. Make sure your insurance company are kept up-to-date on all changes. Otherwise, you could find yourself penalized if something does go wrong.
Businesses may find themselves inundated with claims of some type or another – the most common is an accident or related injury claim. This isn’t a trivial matter. A big accidental injury claim can easily take a small business off the market completely. That’s because you could be ordered to pay sensational sums in damages towards the claimant. Does having to pay millions damages sound fun to you? Probably not.
Of course, injuries aren’t the only reason an employee may sue you. You need to know more about the laws surrounding several work aspects; overtime law, for example, is something both employers and employees can read more about at Celler Legal. Injuries tend to be the most severe, however, and it depends on who was to blame and how serious the aforementioned injury was. If an accident has left someone unable to walk and you are held responsible, the costs are going to be severe. That’s why you need workers’ compensation. Workers’ compensation insures that if a worker is injured a company will pay the costs for you. You’ll be covered completely, and you won’t be putting your business at so much risk via an extremely expensive lawsuit.
Make sure you know how to end a business relationship
So there was this amazing business venture that you couldn’t say no to. The pitch was incredible. But it’s been a good few months and you’ve realized that you’re only going to lose money with this venture. You want to sever your business from the other party to protect your business. But your contract with this partner stops you from doing so for another year!
Make sure you know the exit process of any business venture you’re interested in. It could be disastrous if you don’t!
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