6 Ways to Safeguard Your Business from Risk

February 2, 2023 | Posted in Bank Blogs

Running your own business comes with its share of rewards. But as experienced business owners know, with reward comes risk. From data breaches to competitive pressures, every business must contend with a variety of threats and challenges. The most successful businesses, however, understand the importance of planning for and managing them.

Here are some ways to manage risks in your business:

While you can't always predict when a threat might occur for your business, you can put yourself in a better financial position to be ready for it.

1. Business planning. When you started your business, you may have developed a business plan. Your business plan is essentially a blueprint for your business that outlines your goals and business strategy. Updating your business plan will help you plan ahead, review your financial performance, assess your products, evaluate the competitive and regulatory environments, and set goals for the future.
2. Financial planning. When you set goals in your business plan, you'll need to determine the money you will require to support them. For example, if your goal is to expand, you should determine how much money you'll need to borrow. Financial planning involves budgeting and forecasting.
3. Cash flow management. Your company's cash flow is the most important indicator of the financial health of your business. That's why it's essential to monitor your income and expenses. If cash flow is a problem, look for ways to reduce expenses or increase income. If you have a surplus of cash flow, consider using cash management solutions to maximize those funds.
4. Emergency expense planning. Managing a business often means managing unexpected expenses. Having emergency savings can provide a safety net. You may also consider having a line of credit that you can access to help you manage cash flow problems that may arise.
5. Fraud protection. Cyber theft is one of the fastest growing crimes in America. It's imperative that your business devote resources to guard against breaches, including firewalls and virus protection programs.
6. Insurance protection. General liability insurance can protect you from claims including bodily injury, personal injury, and property damage. If your business provides advice or services, you may require professional liability insurance or errors and omissions insurance that could cover costs if your clients hold you responsible for losses. In addition, with the growth in cyber threats, having cyber insurance can be a smart way to protect your business.