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Aug-31-2019 23:04
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A Guide to Protecting Your Business from Financial Loss
Salem-News.com BusinessWhether you run an online or bricks & mortar business, both financial and product loss can be a risk.
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(SALEM, Ore.) - It doesn’t matter if you have an exceptional product, a strong customer base and many talented employees on staff, a lack of financial management could lead to the failure of your small or large business.
If you want your business to thrive throughout the years, so you can become a stronger organization and enjoy greater profitability, you must take control of your company’s cashflow.
Read this guide to protecting your business from financial loss.
Pick the Right Business Entity
Many entrepreneurs often operate as a sole proprietorship when kickstarting their business; however, it often isn’t the best option to protect your personal finances from corporate liabilities. In fact, the business entity could pose a threat to your personal property and investments should you become embroiled in a business lawsuit.A corporation or limited liability company could provide better financial protection should you become involved in a legal dispute.
Develop a Financial Buffer
It is possible your business could encounter various financial obstacles during its lifespan, which could determine your company’s future. To ensure a large tax bill or unexpected repair doesn’t lead to business uncertainty, you must have a financial buffer in place.If possible, set aside a fixed amount of money each month, which will serve as a rainy-day fund. It will help you to pay an unexpected bill without impacting your cashflow and operations.
Invest in Insurance
While you might view various insurance policies as an unnecessary expense, it could provide your organization with financial security should the worst happen. For example, workers compensation insurance can provide your business with coverage in the event of a work-related accident, illness or fatality.The insurance cover is often a legal requirement in most US states and can protect your company from significant financial losses, which could otherwise lead to the closure of your business.
Start a Loss Prevention Program
Regardless of whether you run an online or bricks and mortar business, both financial and product loss can be part and parcel of running an organization. It is, therefore, imperative to set-up a loss prevention program, which should evaluate potential losses and identify solutions to stop them in their tracks.For example, if you sell fresh produce, you could launch a strategy to sell the products at a discounted rate before they go out-of-date.
Protect Your Data
Every small and large business will be responsible for protecting their files from data loss or a potential hacking. With cyber-security threats rising at an alarming rate, it is imperative to protect every sensitive file to ensure your customers’ data is safe and secure.If you become a victim of a cyber-attack or lose the important files, it cannot only slow your organization down, but it could lead to both legal and financial repercussions for your business.
It is important to introduce techniques and technologies to secure the important files. For example, you should:
- Routinely backup your data
- Use data encryption
- Invest in employee cybersecurity training
- Install anti-virus and anti-malware programs
The above tactics could prevent the files from becoming lost, stolen or corrupted, which will help your business to avoid legal action from clients, employees, suppliers or the government.
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