From car insurance to taking steps to prevent legal action, here’s a guide to how business owners can protect their interests.
In addition to all the other responsibilities a business owner carries, they are also responsible for limiting risk to the business as much as possible. This can range from protecting your finances, data, and assets to taking steps to reduce the likelihood the business could be sued. Successful business people are often those who prepare for the worst outcomes as they can envisage potential problems and put measures in place to prevent them. This could be labelled as pessimism, but there is a difference between healthy pessimism in business and negativity, which can make all the difference to an entrepreneur’s success.
This short guide outlines the key areas of your business you should be protecting and how you can go about this. From how you conduct your business to making sure your assets are protected through liability or car insurance, these 5 simple steps can pave the road for a smooth and stress-free journey.
1. Take responsibility for what you say and do
CEOs and business owners are often in the public eye. This means that what you say and do in business (and even in your private life sometimes) can be used to attack your brand. Your business practices should always be legal and ethical, and business partners should be as clean in their dealings as you. If a company you’re associated with is exposed as having unethical or illegal operations, your brand will be tarnished by association. Avoid criticising competitors at all times and never make slanderous or libellous statements.
2. Keep your personal and professional lives separate
Running a business as a sole trader can put both your personal and professional assets at risk. If your business is sued, your home or car will also be at risk. To avoid this situation, you should incorporate your business as a legal and separate entity. This means isolating the business’ property, vehicles, cash and other assets from your personal life.
3. Get legal representation
Don’t wait until you’ve been sued to find a lawyer. You should have a contact on hand to advise you about how to run your business legally and to advise you through difficult situations so you can avoid being sued. You will need someone who is familiar with business law and ideally has experience in your industry or the issue you’re facing. For example, there are lawyers who specialise in tax law or employment law.
4. Prioritise cyber security
The majority of modern businesses operate on computers and use the internet. While this is often the most efficient way to work it has also opened up a whole new world of risk. If your computer files and internal systems are not protected adequately, you may be at risk of a cyber-attack or a virus. If cyber criminals can access your sensitive data you are in danger operationally, financially and reputationally. If a virus deletes your data or destroys your network, you won’t be able to run your business.
5. Get insurance
Insurance is an absolute must for any business but there are several types of insurance to consider. Liability insurance, for example, protects you should a customer injure themselves on your premises or a client believes your business has not fulfilled a contract. If your business owns cars or you use a car for business, you also need to ensure you have appropriate car insurance. You can compare car insurance quotes at independent comparison site hippo.za. You should also consider adding a clause into your contracts with clients which protects you should you be unable to fulfil your end of the agreement through circumstances beyond your control.