Risks that are endangering your business (and how to manage them)

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Date: 10 November 2020

Road sign warning of the risk of falling or fallen rocks ahead

Running a company can be a risky business. However, there's wisdom in identifying the potential threats to your business and taking steps to prevent or minimise the impact should a threat arise. 

Legal risks

There are laws that cover pretty much every aspect of running a business from who you can employ to how long they can work each day. Your responsibilities as an employer are clearly laid out by UK employment law as are your responsibilities for managing health and safety.

Of course, when something is set down in law, it means that it is your legal responsibility as a business owner to ensure your business complied. Indeed, if you fail to do so, you risk serious consequences which can include fines, prosecution and even prison sentences to say nothing of the damage to your business' reputation.

With that in mind, identifying any potential legal risks and getting them reviewed by a professional is vital. You should also make sure you do everything in your power to stay abreast of changes to employment law and how your business can comply with these changes.

Cybersecurity

Cybersecurity is a major risk that most businesses need to carefully manage if they wish to survive and thrive in the long term. Indeed, companies of all sizes use online systems for a range of purposes such as asset management, invoicing, payroll, and even ecommerce. Therefore, such things need to be robustly protected against the threat of cybercrime.

The good news is that there are options for boosting your business' cybersecurity and minimising the risks. The first step is to make sure that you regularly update your systems and software as this can prevent hackers from using new methods of penetration to their advantage. Additionally, educating your staff on how to recognise phishing threats can help stop hackers from gaining access to your systems and data and creating havoc.

Catastrophes

Have you ever considered what would happen to your business if you suddenly had to cease trading for some reason? There are several reasons why this might happen from the physical destruction of stock or premises due to a natural disaster, fire or flood to your entire server IT system going down. Another issue that can stop a business in its tracks is if a key person is no longer able to work due to illness or death.

Happily, a little forethought and planning can go a long way to managing the potential risk of trading interruptions. For example, having a plan B that will allow things to carry on as close to business-as-usual as possible can make all the difference. For example, investing in data backups, perhaps in the cloud, so that things can return to normal as fast as possible can mitigate some of the risks from a catastrophic IT failure.

When it comes to natural disasters, investing in premises that offer protection such as buildings with fire safety features, or anti-flood measures can be useful. The same goes for holding important stock in more than one location, so if something does happen, your inventory isn't completely wiped out.

Finally, when it comes to losing a key person in your business, you may wish to opt for a key man insurance that will pay out should they become ill or die during service. Compare quotes for key man insurance online. It will help you get the very best coverage at the best price so you can protect your company.

Market

No matter how clever your product or how well put together your business is, it operates within the context of the broader economic market. This means the way that the market is behaving will have an impact on and could be a source of risk to your business.

Indeed, we see this phenomenon happening right now with the recession caused by the global pandemic. Some businesses are experiencing a drastic reduction in demand for their products and services, particularly those in the hospitality industry such as eat-in restaurants, pubs, and clubs. Conversely other companies focusing on providing PPE equipment and hand sanitisers have seen a sharp rise in demand. In both cases, this is less about what individual businesses have done, but what the market is currently dictating.

Fortunately, by staying up to date with how the market is behaving and building flexibility into your business, you can ride out even the most difficult recessions. For example, companies producing beer and alcohol before the pandemic have pivoted to produce hand sanitiser, which has allowed them to largely, weather the storm so far.

Copyright 2020. Article made possible by site supporter Jeremy Bowler

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