Every business regardless of its size is vulnerable to risk. These threats include having internal valuable data stolen, sharing of trade secrets, stolen employee personal health records, compromise of customer credit card information, and so on.
Furthermore, as organizations are racing ahead with digital transformation and remote operations – spurred by the epidemic – cyber threats have become an ongoing concern too.
Just tuning in to your Spectrum TV and switching to a news channel will give you a glimpse of how every other organization is a victim of a data breach and now even at Spectrum TV customer service, they are asking for safety again and again.
Companies, hence, have to invest millions of dollars in business risk management. Because if you put your company, employees, and customers at risk, you are basically self-sabotaging your success.
Assuming you have an understanding of risk management, here are some ways you can protect your business and manage risk:
1: Get Insurance
The very first thing you need to do is get insurance. Insurance is like a safety net. It allows you to safeguard your company in the event of an accident or natural disaster.
It also gives you peace of mind since you know you’ve got something to fall back on if your company is hanging by a threat. The insurance plan will protect your property and your staff in the event of a lawsuit.
2: Stay on Top of Your Cash Flows
For entrepreneurs, running out of money is a huge threat. Unfortunately, cash flow concerns cause more than 80 percent of small firms to fail. Imagine closing your business because you’re drowning in loans or because you are out of money.
To manage this risk, make sure you accurately forecast your spending. You will have to make modifications to your expenses if your operational expenditures are exceeding your budget. It’s critical to develop a financial plan before even starting your business. This plan should outline the following:
- Your spending
- Expenses emerging from operations (such as rent, salaries, inventory)
- current cash flow statement and income statement
- Debts and loans to raise capital
- Financial forecasts
reserving capital is critical in the early stages of starting a business. Maintain an emergency fund to meet unforeseen expenses, and don’t rush to pay off debt. Slowly repaying low-interest loans is better than blowing your entire budget off in one payment.
3: Protect Company’s Data
Cyberattacks are on the rise hitting enterprises around the world. Don’t assume that just because you’re a small business, you won’t be on the hit list of hackers.
Every business is susceptible and so, it’s imperative to build a strong defense system against cyber threats and take appropriate measures to protect customer data.
Protecting your company’s data can save you a lot of money in the long run. It can also help you protect your customers’ data, which is something that many states now mandate. It’s like hitting two birds with one stone: one is the law, and the other is the faith of your customers.
4: Source the Right Talent
Your employees are your biggest asset, they define your company’s culture and your success. After all, it’s the people who make the business a success. You could be at risk if your business is in the hands of the wrong people.
Several startups failed because their founders took advice from the wrong people. Sourcing the right talent is extremely critical. Network with peers who can guide you with their talent and expertise.
It can be beneficial to network with successful entrepreneurs and ask for their advice. Find a veteran or a mentor who can show you the ropes if you’re newly starting out.
5: Document It
Always keep track of crucial business transactions like sales, tax payments, and operating expenditures. Double-check that your staff is correctly documenting everything, from signing checks to balancing the books. Furthermore, document management with minimal errors is necessary.
Documentation reduces the danger of theft and fraud. Plus, keeping track of your finances is generally a good practice. It can help you keep track of unnecessary expenses too.
6: Educate and Train Your Employees
People are always the first line of protection against cyber threats despite that the invention of technologically advanced software and security systems.
The more informed and prepared your employees are, the less likely they will become victims of phishing and social engineering scams. They’ll also be less likely to click on a random link or download something unusual, which might expose your whole network.
To minimize cybersecurity risk, provide your staff with regular, mandatory training on information and cybersecurity threats.
They should be given clear guidelines on how to recognize and respond to potential cyberattacks. With technology and dangers evolving at a quick pace, make sure your employee training is up to date.