5 Things That Could Get Your Small Business Into Trouble (& How To Prevent Them)
As a small business owner, you have much to consider and protect when it comes to your business. From managing finances, hiring reliable employees, and maintaining quality customer relationships, there are many pieces at play which can make or break your success. Unfortunately, due to the nature of running a business, some risks can’t be totally avoided. That’s why having the right protection in place is essential for mitigating any potential problems and preventing them from happening in the first place. The good news is below you can find 5 of the most common issues business owners run into, and how to avoid them becoming a major problem. Read on to find out what they are.
1. Not Having Proper Insurance
Having the right insurance policy is essential for any business, regardless of its size. A Business Owners Policy (BOP) is a cost-effective way to protect your business from losses due to property and liability risks. BOPs typically include coverage such as general liability, commercial property, business income, and crime insurance—all of which can help protect your business in the event of an accident or legal dispute.
2. Failing to Keep Accurate Financial Records
Maintaining accurate financial records is critical for any small business, as it helps you track your expenses and revenue, develop budgets, and more importantly—avoid any potential tax issues with the IRS. Keeping detailed records of all income and expenses can help ensure that you’re not only in compliance with tax laws, but that you’re also making the most of your business’s finances.
3. Ignoring Legal Regulations and Requirements
It’s important to make sure that your small business is following all local, state, and federal regulations. Taking the time to understand which regulations apply to your business—and adhering to them—can help you avoid costly legal penalties and lawsuits.
4. Poor Hiring Practices
When it comes to hiring top employees, make sure that you’re taking the necessary steps to verify their background and qualifications. Not conducting due diligence in this area can lead to problems down the line, such as workplace disputes or incidents of discrimination.
5. Lack of Emergency Preparedness Plan
Having an emergency preparedness plan in place can help your small business quickly respond to a crisis and minimize any potential damages or losses. A well-crafted plan should include procedures for dealing with common emergencies such as natural disasters, accidents, and cyberattacks. Additionally, be sure to train your employees on the plan, so that everyone is aware of their roles and responsibilities in the event of an emergency.
By taking these steps, you can help ensure that your small business stays in compliance with all applicable laws and regulations—and protect it from any potential financial or legal risks. A Business Owners Policy (BOP) from a trusted insurer can also help provide further coverage for your business in case of any unexpected losses.
By investing the proper time and resources into understanding potential risks and taking the right precautions, you can better protect your small business and create a more secure future.