A lot of small business fail in the first few years – not because they fail to get customers, but because they fail to safeguard against other threats such as cybercrime and lawsuits. Here are just some of the biggest threats to watch out for as a small startup.
Late Payers
Late paying customers can swiftly cripple a business. Without money coming in, many companies can’t afford to pay outgoing costs, which then result in debt. In order to discourage late paying customers, you need to be following up clients and actively working to get the payments you deserve. If you need to take out a loan to cover outgoing costs, try to rely on specialist borrowing methods such as invoice factoring. It could also be worth cutting ties with customers that consistently pay late.
Cybercrime
Cybercriminals often target smaller businesses because they’re less likely to have strong security in place. This can result in valuable data being stolen or held hostage. You should make sure that your files are all protected with digital security software and that you have files backed up. Having strong passwords is also important – most cybercriminals break into company systems by guessing passwords. To help implement better digital security protocol, it could be worth taking a course such as this Alpine security certified authorization professional class. You can also hire digital security advisors to examine your company for weaknesses and suggest changes.
Lawsuits
A lot of small companies can end up falling victim to lawsuits because they didn’t have enough legal protection in place. People sue companies for a variety of reasons – it could be due to an injury, stolen content, a faulty product, false information or simply general malpractice. Insuring yourself can help to pay off any lawsuits made against you – the likes of Aviva general business insurance can be worth taking out for giving you comprehensive cover. Putting in place health and safety measures, getting contracts professionally written up and training your staff can all meanwhile prevent accidents that could lead to lawsuits.
New Laws
Failing to keep up with changing business law can leave your company open to court fines. This could include not paying the right amount of tax, not offering employees benefits that you ought to be offering or not having certain mandatory health and safety measures in place. To check that your company is up to date, it could be worth hiring a legal advisor. Keeping abreast of business news is also important allowing you to plan ahead for any changing laws.
Machinery Failure
Many modern companies are reliant on some form of machinery to function whether it’s computers, manufacturing machinery or a company vehicle. If this machinery breaks, you could find yourself unable to conduct business, which could lead to losing customers and a damaged reputation, not to mention any costs you may suffer getting the machinery fixed/replaced. To avoid machinery failure, make sure to regularly service your machines – this will allow you to spot faults early. Having a technician on call can also be handy. You could also insure your machinery to help cover repair costs, or simply have some savings set aside as an emergency.
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