How can small businesses minimise risks?
As someone who's experienced it all before, I fully understand the thrill small business owners feel when they start out a new company.
In the midst of all that excitement though, it can be easy to forget just how risky running a small business really is. Risk is part and parcel of running a company, no matter how large or small, and every business owner needs to know how to cut it down as much as possible.
With that in mind, here are four tips on minimising risk in your small business.
1. Insure EVERYTHING
Obviously, you don't need to take out a policy for each pen and paperclip in your office, but it's worth taking stock of just how many of your business's assets are worth insuring.
It's commonly said that although insurance can be expensive, it's barely a fraction of the potential costs of being uninsured. Make sure your business takes out the necessary policies to ensure it is protected from all conceivable angles.
Insurance products are becoming increasingly diverse and specialised, so it pays to shop around. There are policies specifically tailored for small businesses, for example, as well as industry-specific products. Marine hull insurance, anyone?
2. Keep an eye on your cash
Cash is the lifeblood of all businesses so it pays to keep it protected. Maintaining a steady cash flow is a requirement for any organisation - it will be the first thing you rely on in times of crisis.
Be stringent in your budgeting and cash flow forecasting to reduce the chances of ever running dry. And should your business ever run into cash problems, know what solutions are at your disposal, such as debtor finance.
3. Branch out
Or to use a dreadfully overused cliche, don't put all your eggs in one basket.
Even if your business operates in the smallest of niches, it's important to diversify your offerings so you always have a range of markets to tap into. If you rely on only one offering or income source, you'll quickly regret it should demand collapse.
4. Fail to plan, plan to fail...
No business is small enough to operate without a solid business plan.
Make sure you take the time to write up a comprehensive plan that outlines how you'll be heading into the future, and update it regularly to account for new and emerging risks.
Earlypay has supported Australian SMEs with fast and flexible alternative funding solutions for more than 20 years. Our invoice finance and equipment finance products allow business owners to proactively manage their cash flow, freeing up your working capital for investing in growth. To chat about whether our solutions could be right for your business, call us on 1300 760 205.
If you'd like to learn how Earlypay's Invoice Finance & Equipment Finance can help you boost your working capital to fund growth or keep on top of day-to-day operations of your business, contact Earlypay's helpful team today on 1300 760 205, visit our sign-up form or contact [email protected].