5 Common Threats Small Businesses Face

Every business today faces many different challenges while operating on the market. It’s not just about competing with other companies and making sure the clients are interested in your offers. It’s also about managing your daily operations and ensuring your business keeps expanding and going forward.

However, the majority of business owners like to rush things along, skipping crucial steps along the way. This can later turn into a grave mistake, with the potential to ruin the entirety of your business and any effort you made along the way. That’s why it’s fundamental to pick your steps and manage your company with care so that it can grow in the right way.

Negative cash-flow threat

Cash is the lifeline of your business and its most important asset. This is because money is the most liquid of all your assets and can assist you when it comes to covering immediate costs or making necessary investments. To determine your cash flow, you’ll need to calculate your accounts payable and receivable. Basically, the cash going to and from your business. It’ there’s more money entering into your company than it’s going out, you have a positive cash flow. Without money, your company can easily go bankrupt even if you’re generating excellent revenue. You will be able to improve your cash flow if you lower your overhead costs, make sure you receive payments from customers on time, having a savings account, and so on.

Cyber threats

Recent high-profile cyber-attacks have brought network security to the fore, meaning that many more businesses are adopting the best cyber-security practices. Cyber-security is important, especially for people involved in running an online business, where implementation of stringent security practices has become second nature. It’s easy to see why – not only do technologies like SSL keep the company’s data secure, but the sight of that little green padlock in a browser’s bar gives the customers confidence that they’re dealing with a legitimate business. Implementing strict security measures such as multi-step authentication, strong passwords or password managers, and cloud-based cyber-security can help minimize cyber threats to your business.

Physical threats

Unfortunately, while the relationship between security and authenticity is taken as self-evident in the ecommerce sector, businesses with brick-and-mortar premises often neglect this crucial practice. Adopting the best security practices for your organization’s physical locations can work wonders when it comes to building customer confidence, all while protecting you from threats such as theft, breaking and entering, and other types of material damage. For example, using video surveillance such as JD Security axis cameras can help you deter crime and theft, enable you to monitor activity, help reduce insurance costs, and build a safer workplace environment for employees. Physical security measures don’t just increase safety, they increase the legitimacy of your company.

Business interruptions

Winning a marathon is hard if you’re constantly taking breaks mid-race. The same applies to your business venture – you have to maintain the same speed at all times in order to be profitable. In other words, business interruptions can be by far the largest threat for your small company. Roughly around 40% of organizations don’t get back on their feet after a business interruption facilitated by natural disasters such as floods and fires, according to FEMA. Obviously, you can’t accurately predict the next state of emergency, let alone completely recover if it happens in your city. Still, you should be able to prepare your small business for the worst-case scenario. For instance, get some business interruption insurance, or prepare a backup location to act as a temporary base to minimize the continuous damage that occurs while your main location is being repaired.

Employee injuries

Every business owner today must comply with safety and health obligations or standards, particularly in terms of workplace injuries. If someone from your staff sustains an injury on the job, you will be obligated to provide them with workers’ compensation coverage and indemnity payment. Employees’ injuries not only facilitate negative effects for your business in the form of medical treatment expenses and lost productivity, but also inflate your business’s insurance premiums. In order to minimize chances of such unfortunate outcomes, it helps to educate your workers about workplace safety and loss of control and make sure that you have adequate pre- and post-accident procedures in place.

While the threats to your business are numerous and unavoidable, most of the time you will be able to deter most of them or minimize their consequences in case they do happen. But only if you take precautions and have adequate defenses in place. Stay safe.