5 Ways to Safeguard Your Business From the Unexpected
By Andrew Patricio
September 02, 2015
Small Business & Entrepreneurship
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By the small business content developers at BizLaunch.com.
By their very nature of running lean, small businesses are often more easily disrupted when something out of the blue comes up. A client pays late, putting your own ability to pay vendors in jeopardy. A fire destroys your inventory. Whatever the challenge, it threatens to destroy your business if you don’t have a plan in place.
While you can’t completely mitigate the risks of running a business, you can at the very least take measures to safeguard it.
- Back Up Your Data
What would happen if your computers were destroyed? Would you be able to access the files you need to do the work you do? Or would you have to start completely over?
Years ago, it was costly to back up data. Businesses had to invest in expensive infrastructure to have servers with duplicate copies of important files. Now it’s much easier to back up your data. Cloud-based storage, such as what DropBox provides, is affordable and easy to use. A perk of cloud backups is that you can also access your files from anywhere.
- Have Cash in the Bank
This is always a challenge for the cash-strapped business, but an imperative action item. Because you can’t guarantee that your clients will pay on time, you need to do whatever it takes to ensure you’ve got enough money to pay your own bills, as well as payroll.
Start by setting aside a percent of every payment you receive into savings. Before long, you’ll have a cushion that should get you through any dry spells or late payments.
- Have a Payment Policy
To nip those late-paying clients in the bud, make sure you have a clearly defined payment policy that stipulates that late payments will be charged a late penalty. Alternately, you can offer a discount for early payments.
Your goal here is to communicate with clients and let them know what your rules are about when payments are due. Don’t let people walk all over you; be firm in your policy.
- Have a Backup Mini Me
Because you’re the business owner, you make the decisions. But what happens if you’re sick for a prolonged period of time, or simply want to take a vacation? Appoint someone to act on your behalf, and outline what you are comfortable with them doing without your permission. Anything else will need to wait until you are able to consult on the decision.
Don’t wait until you need that person’s help desperately; start training them on the essentials that you would need done in your absence to ensure they are comfortable taking the role on.
- Keep Important Files in a Safe Place
Beyond having your digital files backed up, make sure your important original contracts and documents are securely stored. That might mean putting them in a lockbox or even safety deposit box at a bank. Make digital copies of them so you can access the information they contain, even if it’s more of an effort to access the hard copies. Yes, you’re busy today, but taking measures like these could prevent a business-threatening disaster tomorrow.