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Smart ways to reduce risk in your business

riskIf you want to be in business, you have to be risk-tolerant. As my dad once said, “An entrepreneur is a person willing to take a risk with money to make money.” Risk is in the job description.

But, that said, there are ways to reduce the legal, financial and technological risks that small and midsize businesses face.

Financially speaking, it’s important to be prudent with your capital. Try to keep overhead low. But even that may not help you if the economy tanks. One way to reduce the risks associated with an economic downturn is to diversify. That means selling several types of goods and services if it’s feasible. But you also want to strive to diversify your client base, so that you’re not too dependent on just one or a few clients. Having all of your financial eggs in one basket is never a good idea.

Listen to this new episode of The Carbonite Podcast for even more advice on how to manage risk at your company:

On the legal front, it’s obviously a good idea to avoid getting sued. But try to avoid being a plaintiff as well, if that’s possible. As a retired attorney, I can attest that lawsuits are expensive, exhausting, exasperating and emotionally draining methods of resolving disputes.

Technological risks include data breaches, malicious hackers and the unprecedented rise in ransomware attacks. You can mitigate these risk by investing in a solid cybersecurity software package that includes firewall and antivirus software. And you need to back up your data. It’s the only way to be certain you’ll get critical business information back if you’re hit with ransomware or some other form of malware.

Here are some more smart ways to avoid risky situations:

  • Incorporate: Create a Limited Liability Company (LLC), an S Corporation or a C Corporation. These types of entities serve as a firewall between you and the business. That means business debts will not be considered your own personal debts. An accountant can explain which entity is best for you.
  • Put it in writing: Whatever it is, it needs to be in writing. Why? People’s memories fade over time, people make mistakes, and people lie. Get agreements in writing so you always have proof.
  • Get properly insured: Today, you can even get insured against hack-attacks. Insurance is a surefire way to reduce financial risk to your business.
  • Lawyer up: You won’t regret having a good lawyer on your team. The right attorney will steer you away from trouble and protect your assets.

Many entrepreneurs have proven themselves to be big risk takers—Steve Jobs, for example. But great entrepreneurs understand that there’s a difference between a wild risk and a calculated one, and they always look for ways to reduce risk wherever possible.

To learn more about how to reduce the risk of ransomware, visit the FightRansomare.com homepage today.

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