Financial and Strategic Risk
Having control of your business’ finances is important on a number of different levels. Most importantly, how can you know what you are capable of doing if you do not know where your finances are at. The other aspect that fits with knowing what your business is capable of doing, is knowing when to do it. Looking at market trends and competition are important. A business owner that stretched his finances to buy an oversize commercial property in 2008 is probably really regrets that decision because he took on too much financial risk without strategizing. That might be a bit of an extreme but you can see the point.
Yes there are some of the obvious things that need to be taken under consideration like workers comp and health insurance but there is more that many business owners overlook. Employees have access all your business’ secrets including customer and vendor contacts. It’s not unprecedented for an employee to leave your business to work for a competitor or even start their own operation that competes with you. Those trade secrets that you have built up can be used to hurt your business.
How about employees overstepping their authority and making promises or agreements your business can’t fulfil? Have you thought about how to avoid a wrongful termination lawsuit? Employees are great for your business but they come with a lot of potential risks.
Supply Chain Risk
Technology and communication has progressed to a point where many businesses are operating on lean business models. These businesses rely on subcontractors and other manufactures to handle certain portions of the workload. Some even practice “just-in-time inventory” habits where they do not store a lot of the inputs needed and rely on vendors or contractors to deliver these inputs just in time. These practice, while they can be lucrative if done correctly, take on the risk of relying on third parties to not only produce on time but provide your business with a quality product on time.
These risks can have a big impact on your business. One thing goes wrong and there is a lawsuit which is costly and time consuming. That is not to say that you should avoid all risks. Investing in good legal counsel can allow your business to take on these risks. Planning and having the right legal documents and contracts in place can protect your business. Your business’ legal counsel can help you assess and address these risks and others. This will allow your business to operate at its full capacity and avoid as many potential issues as possible. And who doesn’t want that for their business?
To find out about what risks you might be overlooking or find help avoiding risk, click HERE and find out more.