Every small business owner is faced with various business risks, whether related to an injury, theft, damage to property, employee discrimination claims, or liability suits. As much as you plan for success, as a business owner, you must have these risks on your radar. You should be prepared if and when they materialize.
What are your risks?
There are different kinds of risks: operational, credit, market and reputational. These risks can be internal, for example, employee negligence, or external, for example, changes in tax law. Small businesses, just like large ones, are subject to most of those risks. It is important, therefore, to evaluate the likelihood of each of those risks, their severity, and the costs of mitigating them.
What is the risk management plan?
You should develop a strategic plan that details how to mitigate these risks when they materialize. The plan should be made with as much input as possible, involve industry experts who have experienced these risks and have handled them before. The plan should have an action plan and assign responsibilities to individuals who will actualize these plans.
The risk management plan is a live document. It is not something to develop and store on the shelf. You need to review and re-examine your business risk based on the changes in the industry, economic developments, and political environment.
Do you have business insurance?
It is highly advisable to talk to an insurance broker or an agency that understands the risks involved in your industry. Having the right kind of insurance coverage will help you to defend against the legal claims, damages, legal defense costs, and resume business operations after a major natural, financial, or technical disaster.
Do you have an attorney?
The services of a business attorney are crucial for small businesses. A business attorney can provide crucial input when the risk management plan is being developed. He can also educate you to identify and avoid potential problems before they turn into major legal and costly issues.
Disclaimer: This article is intended to serve as a general summary of the issues outlined therein. While this article may include general guidance, it is not intended as, nor is it a substitute for, a qualified legal advice. Your receipt of this article from Lexern Law Group, Ltd. (the “LLG”) or any of its attorneys does not create an attorney-client relationship between you and the LLG. The opinions expressed in this article are those of the authors of the article and does not reflect the opinion of the LLG.