7 Tips for Minimizing Risks (And Keeping Employees Safe)
Running a business and facing risks go hand in hand. Starting a business is, in itself, the ultimate risk; you’re staking your livelihood and your personal goals and growth on the success of a brand new organization. Once you start hiring other people to work for you, the risk increases dramatically, and so, you must take certain steps to not only protect your dream but also your employees and the business itself. Minimizing risk in business means not only potentially saving thousands of dollars per year, but also provides a sense of security for the people that work for you and your own personal security. Here are seven tips for minimizing risks and keeping your employees safe.
1. Have a Plan
Every good business has a plan. Without a plan, you have no direction, no sense of purpose, and no way to navigate the adversity you’re certain to face on your journey as a business. A business plan is also an important aspect of securing funding, especially if you’re a startup. Lenders and investors don’t often shell out cash to businesses with no plan! A plan should be well-thought-out and include your ideas for the business, plans for downtime, a contingency plan for if the business should go under, and more.
Creating a business plan requires more than a bit of effort and some serious thought. You’ll need to completely iron out your future goals for the business, and how your organization will be structured. If you’ve never created a business plan, or you’re simply unsure how to start for your particular industry, here’s a guide to creating the best business plan.
Sometimes, you just can’t handle every task associated with starting and running a new business, and you’ll need to outsource certain parts of the business to ease the burden. Don’t be afraid of the word outsourcing. Although it almost seems to carry a negative connotation among small businesses, outsourcing is actually a smart plan for many parts of the business, especially if you’re unsure what you’re doing.
For example, outsourcing your HR department with a PEO service can save you the hassle of setting up payroll, benefits, and more. Your employees will appreciate a dedicated and professional HR resource, and you’ll always be in compliance since the PEO service is responsible for this aspect of your business. Read the list of the best PEO companies on Retire at 21 to find the best fit for your business.
3. Stay in Compliance
Speaking of compliance, this is something that many startups and small businesses fall short in. Whether it’s staying in compliance with state labor laws, paying taxes accurately and on time, or industry standards, every business has rules that it must follow; or else, be subjected to federal, state, and local laws and penalties.
This entails plenty of research prior to opening your business. What kinds of permits do you need? Are you operating at a storefront, or simply from a website? Be certain of what your business’s requirements are to avoid penalties and keep your employees safe.
4. Keep Your Promises
When you don’t keep your promises to your employees, you create an air of mistrust among your staff. This is inherently dangerous in itself, as a poor relationship with employees can put your entire organization at risk. Not only will you lose qualified help, but you could easily create a reputation for yourself and thus make replacing that help more difficult. Keep your promises to employees, and if you can’t be sure to be as transparent as possible when you explain why you had to break your promise.
Every business that’s operating a storefront or operating in a high-risk industry should have insurance. Insurance helps pay for the things that you don’t expect; such as a fire, a lawsuit, and other sudden challenges. Most leasing companies require insurance as part of the lease agreement, so if you plan on renting a storefront or warehouse, you’ll need to have it.
6. Save Money in an Emergency Fund
What happens when your business has downtime or experiences a damaging event that insurance won’t cover? Having money saved in an emergency fund is just as important to a business’s security as it is to personal financial security. Most financial experts suggest that individuals should aim to save 3-6 months’ worth of expenses, and the same goes for a business. Your employees will still need to be paid should you experience a drop in sales, and unpaid expenses can add up quickly and your business will fall further behind.
7. Diversify Your Income
“Don’t put all of your eggs in one basket” the old saying goes, and in business, it’s as true as ever. If your business runs solely on one revenue stream, you’re putting yourself (and your employees) at risk. Diversifying income means offering your business greater financial security by boosting profits from differing sources. When once revenue stream experiences a drop in profits, the others are still providing the business with valuable income to keep things running.