As a new entrepreneur, you likely already understand the risk of losing money because of cash flow interruptions, unforeseen property damage, or a saturated industry market.
Yet, savvy business owners understand that the greatest threat is often the one they don’t see coming. The first step to a thorough evaluation of your small business’s risk financing needs is to identify the dark corners that could be hiding trouble.
1. Data Breach
You may not consider your company to have any data worth stealing or be large enough to be on anyone’s radar. Still, weak cybersecurity protocols could leave you open and vulnerable to attack.
2. Employee Fraud
There are several different ways that your employees could defraud your company. For example, falsifying time records is one of the easiest ways for employees to take advantage of today’s work-from-home climate.
3. Worker or Customer Injury
You might not run a dangerous workplace, or you could manage the inherent risks by adhering to every OSHA recommendation. Yet, it is possible that an employee or a customer could still suffer a major injury or illness, leading to soaring workers’ compensation insurance premiums or personal injury lawsuits.
4. Reputation Damage
The dawn of the internet spurred an explosion of word-of-mouth advertising, which many consumers unilaterally deem the most believable. It only takes one unhappy customer with an unaddressed complaint to start a campaign against your business’s reputation, and one social media post to communicate his or her cause to the masses.
5. Regulatory Compliance
Some form of code or regulation governs nearly every industry, and the consequences of compliance failure can range from fines to prison time. In addition to legal penalties, it is worth noting that most regulations have been enacted for a reason, such as health or environmental concerns. Violations could leave company directors with far-reaching guilt from the results of their actions.