You do everything you can to make sure your business is a success. You wouldn't deliberately jeopardize what you've worked so hard to build. Yet every entrepreneur can fall prey to a few business-killing behaviors, usually without even realizing it.
It may be something as innocent as choosing the wrong client or making a joke at an inappropriate time. Even a small mistake can throw a company off track, eventually leading to its demise. But acknowledging that nobody is perfect may be the best thing you can do for your growing business. As early as possible, you should put protections in place that will promise continuity no matter what issue or scandal comes up along the way.
Here are some tips to keep your business safe.
Insure Your Business
A business is likely one of your most valuable assets, so why wouldn't you insure it? According to Insureon's Small Business Outlook 2017, one in three businesses faced top hazards like theft, customer slip-and-fall accidents, employee injuries, or a client complaint in the previous year. Yet 75 percent of all U.S. businesses are underinsured.
One of your first stops as a business owner should be with a small business insurance specialist. You probably need basic liability insurance for your business, but you should also pay close attention to typical insurance gaps, including business interruption insurance, cyber insurance, equipment breakdown insurance, and an umbrella policy to cover anything else that might happen. If you're in a flood-prone area, that type of insurance is worth consideration, as well.
Designate a Backup CEO
Yes, as a small business, you likely don't have a team of leaders ready to take over for you. But this is worth cultivating anyway.
You should definitely stop to consider who might run your business in the event you couldn't. I've seen many a founder who doesn't give this a second thought, working 16 hour days, burning the candle at both ends, months at a time.
These people are taking the fast lane to burnout. If for some reason you could no longer oversee things, would you want your business to shut down completely? If not, consider a trusted colleague, friend, or relative who could take over.
As your business grows and begins to add employees, continue to keep this in mind. The first employee you hire may someday be the perfect person to run your business in your absence, whether you're on brief vacation or you have to take extended time off for personal issues.
This should probably be one of the things you're evaluating when you make the hire in the first place.
Have Legal Counsel
There's no one who has gone into business for themselves who hasn't made a bad choice from time to time on who to work with.
From the start, one of the best insurance policies your company can have comes in the form of contracts. You should consider having one for every business relationship you start, from the clients who request your services to any freelancers you use.
You should also have a non-disclosure agreement in place for any interaction where you're sharing information you want to keep under wraps.
Although it can be pricey, consider consulting an attorney on these contracts to make sure they're legally sound. This will also help you establish counsel that can help you any time you have a question or concern.
Use a Filter
As mentioned, you must carefully vet the people you work with on a daily basis. This starts with your first client and continues as you add vendors, contractors, and employees. Pay close attention to any red flags, including an inability to answer questions directly and refusal/inability to give references when asked.
As your business grows, you should pay particular attention to your hiring processes. Each candidate should be pre-screened before you make a final hiring decision. This includes performing due diligence on checking references and calling previous employees.
Drug testing and criminal background checks can also keep your business safe while also allowing you to fill your team with top talent.
Often the everyday decisions you make as a business owner are what have the most lasting impact on your company's future. The good news is that you can put measures in place to reduce the harm those mistakes can cause. Most successful businesses invest in insurance and legal protections to reduce the risks they'll face, especially as they grow.