How Small Businesses Can Minimize Risk

If you own a small business, it’s safe to say that you are a risk-taker. The danger of taking risks is that you may occasionally overlook smart ways to minimize unnecessary problems. No matter how well you’ve planned and thought about everything, problems are bound to arise. Here are ways to soften the blow.
Be mindful of business savings.

Create a contingency plan and set aside up to 6 months of operating costs in reserves. When creating a contingency plan, always imagine a worst-case scenario. Ask yourself these questions:

  • Where will my business be 3-6 months without my biggest client?
  • Which expenses can I cut?
  • Which ones should I keep paying?

Losing a big client may take half your revenue, but it can also take half your expenses as well.

Have your business insured against certain risks.

A standard business insurance policy isn’t enough to protect your business. You need to know that there are certain risks your business faces and it is important to insure against them.

If your business uses expensive machinery and equipment, it would be wise to make sure you have them covered. That would be a costly problem. Don’t wait until it gets damaged or lost before deciding to insure them.

If your business transaction involves going online, determine whether your policy covers these transactions. If not or if you feel you need more coverage, talk to your agent.

The key people in your business must be insured.

If your key employees fail at their duties or leave, your business may fail. Thus, you should consider getting key-person insurance on anyone who is critical to your business. If you already have one, re-asses your policy periodically to ensure that it isn’t outdated.

Your insurance changes with your business.

Meet with your insurance agent every year to know whether there is a need to change your policy. Go through the coverages and discuss them one by one. This step is crucial when you’ve made changes in your company like acquiring a new business, hiring new people, introducing a new service or product, or expanding to a different city or state.

To minimize risks, it is important to prepare for them in case the worst thing happens. Be protected against them by getting business insurance that is reliable and affordable.

Wellcovered Insurance offers quality business insurance products and services to ensure that your needs are met. Get a free insurance quote from us and feel free to discuss it with our agents. Call us at (386) 218-4951 or visit us at our office today!