As a business owner, your job is to protect the assets of your venture as well as the interest of your customers. However, due to changing regulations and increased risks, new vulnerabilities appear every day. To reduce the risk of legal challenges and loss of reputation, as well as financial ruin, you need to be on the lookout for the below risks and address them before it is too late.
1. HR Complaints
You need to make sure that you are maintaining a positive relationship with employees, and your HR department functions are well defined. You need to put anti-discrimination policies in place, or you might be accused of unfair treatment and taken to court. From offering flexible working, to having clear career development and appraisal processes in place, there are several ways you can prevent complaints against your human resources operation.
2. Public Liability
Some businesses need a public liability insurance before they get a licence to trade. However, almost all companies would benefit from some kind of cover that prevents court cases. If one of your customers gets injured, they are likely to contact an expert personal injury attorney who will pursue a case against your business, and can potentially ruin your reputation.
3. Cyber Security Issues
You need to protect your own and your customers’ information online. If you fail to update your security system, and don’t have enough protection to defend your website and cloud databases from cyber security attacks, you might lose customers, contracts, public funding, and one of your most important assets: reputation. Your customers will stop trusting you if you let criminals get hold of their personal or financial details, and you might need to go out of business. Cyber criminals might even disable your computers, and erase all data from your hard drive, making it extremely difficult to conduct any business.
Depending on which industry you are in, there are certain government guidelines you need to adhere to. Every company dealing with customer details has to comply with the Data Protection Regulation, making sure that information held of their employees, the public, and customers is held secure ad used fairly. If you fail to comply with the related regulations, you might face a huge fine, or – in extreme cases – have your trading licence withdrawn. Health and safety regulations, workers’ rights, and pension regulations also have to be reviewed by your management to make sure you remain compliant, even if the law changes.
You need to have provisions in place to ensure that your clients pay on time, or you might face financial problems. Talk to a business financial expert who can recommend methods of getting your payments within the deadlines, and recovering debt fast and in a cost-effective way. You can outsource your financial functions, so you can focus on getting ordered, while an expert company recovers outstanding amounts owed to you. Thanks to the Cloud technology, you can now manage your finances from anywhere, and automatically send out payment reminders to non-paying customers.
6. Cash Flow Issues
There are different reasons why your company might face cash flow issues. If you need to finance a large project, try to ask for a deposit from the client or get a short term financial agreement from your bank. You will need to pay your workers and budget for your operational expenses. Sometimes, cash flow problems are caused by the lack of planning or slow growth. Take a step back and find out the root cause to be able to address it effectively.
7. Currency Fluctuation
If most of your customers are overseas, and you get paid in foreign currency, or your suppliers are abroad, your business model will be vulnerable to currency fluctuation. If there is a major exchange rate change, you might see all your profits disappear. Try to tie your contracts to your currency, or secure a fixed price for a set term, so you can adjust your budget better.
Whether you own a small business that relies on clients abroad, or a larger organisation with hundreds of employees, you need to be on the lookout for potential vulnerabilities that can be fatal for your company. Get legal advice, and make sure your compliance documents and internal policies are up to date. Review your insurance policies, and sign up for a contract with computer security contractor, to protect your business information and customer data. Reduce the risk of exchange rate fluctuation by putting set price agreements in place, and you can plan your finances better.