If you’re running an SME or a small to medium-sized enterprise, you always need to keep costs in mind. Costs and spending must be your top priority. Essentially, you have to keep them in check and ensure that you don’t go over your budget. It’s probably already stretched to its limit even now. However, it’s true to say that a lot of business owners do indeed make mistakes with spending. They pour too much money into a certain area of their company. Or they don’t protect their business in a way that they should. They might even simply not realize that they are overspending in a certain area. We can avoid each of these issues by getting proactive and shaping your business model. Let’s start by thinking about how to protect your business from certain financial disasters.
Preventing Financial Damage
There are a few aspects of your business that could cause financial damage. The first is looking after your employees. You may not realize this, but as a business owner, you do have a duty of care to anyone working within your company. Particularly, if they complete their job on work premises that you own. Now, you might think ah, well I rent my business property, so it’s not a problem for me. It’s an interesting idea but one that isn’t going to hold up in court. This is usually because a landlord will shift responsibility if they are renting to a business owner. It’s the common rule of premises liability. If you own a building or property, you are responsible for anyone who is injured or damaged in any way while there. That could be a client, customer, investor, or even a member of the general public.
If any one of these individuals is injured, it will open up a personal injury claim. A skilled personal injury lawyer can get amounts in damages of up to five hundred thousand dollars! In fact, many cases have gone past this amount. It generally depends on the extent of the injury, whether it could have been prevented and whether it will affect other aspects of their life. For instance, an injury that puts a worker off sick for a couple of weeks won’t result in a large payout. But an injury that puts a worker permanently in a wheelchair almost definitely will.
So, how can you prevent being hit by this type of financial issue? Well, you protect your business with general liability insurance. If you have general liability insurance, you will be covered for most financial issues. That will include the possibility of being sued by an employee. Although, there is almost always a cap on the amounts you can claim. If the injury extends over this amount, you can guarantee that you’ll be paying it out of your own pocket.
You can also arrange workers’ compensation. With compensation such as this, you can make sure that people in your company always receive a fair amount when they are put off work. Due to this, they don’t feel the need and in most cases are unable to make an additional legal claim.
You may want to take steps to make your workplace safer and prevent accidents from occurring as well. For instance, you can appoint health and safety officers. They will check your property for any issues or problems that could cause an accident. With a measure like this in place, you are less likely to lose a lot of money in a court. Although to be fair most injury claims are settled outside of court anyway.
Theft And Fraud
Again, you can protect yourself from theft by making sure you have an insurance plan in place. If you do find that money is stolen from your business you want to make sure you can claim it back as quickly as possible. This is easy with an effective insurance plan. The only thing we do recommend is that you get a lawyer to look over your insurance coverage. You want to make sure you know exactly what is and isn’t covered by the policy. Otherwise, you might be in for a nasty shock when you suffer a loss that you’re not legally covered for.
Unfortunately, an insurance plan won’t protect you from the damage theft can cause to your business reputation. Don’t forget if you are robbed, or information is stolen they are probably not targeting you directly. Instead, they will be going after your customers and clients. They will be attempting to commit fraud and steal from them using the info they stole from them. It is more secure for the thieves as it makes the robbery difficult to track. Not impossible, but certainly more of a challenge. So, while insurance can get you any financial losses you incur it may not cover the loss of profits. This is where a crime could severely damage your business.
It’s important then that you do make sure you are investing in the latest security for your business. A lot of business owners do not place security as a top concern. Particularly online security and this is mainly true for smaller companies. They think that bigger businesses are more likely to be targeted. Make no mistake, criminals will target anyone that they think is going to be an easy job. If you leave the door wide open with no security, theft will be in your future. That much is a guarantee.
The best form of protection against this type of crime is an IT support team. They will monitor your networks and constantly check for any breaches. If they do come across issues, they will fix them as quickly as possible so you can get back to running your company.
Over Spending And Idiotic Choices
You do need to be careful with spending too much on your business. This is perhaps the easiest way to lose money because business owners do it without even a second thought. It’s so common that there have been reports investigating the worst areas that business owners overspend. You’d be surprised by some of these. Particularly when at the top of the list there is stationery. We bet you’re thinking, stationary must only cost a few hundred. Actually, medium-sized businesses often spend thousands replacing their stationery each year. It has reached the point where a stationery bill can be anything up to ten thousand. That’s insane, and it’s even worse when you realize that price checking could cut that cost down. In the age of the internet, there’s no excuse not to search for a cheaper deal.
Of course, there are larger actions to take to save as well. For instance, you should be thinking about making your business greener. One of the best ways to do this is by looking at renewable energy. Before the year is out you can arrange for renewable sources of energy to be installed on your business property. A brilliant example of this would be solar power. You can get solar panels for a few thousand. Through the summer months, you won’t even notice your energy bill. It could essentially be zero, and you can breathe a sigh of relief knowing you’ve saved a lot of money. The argument against this idea is that installing the panels costs a small fortune in itself and this is true. However, it’s an investment that will pay for itself in just a couple of years.
There are other areas business owners constantly overspend as well. Marketing is perhaps the biggest culprit here. In a highly competitive market, there is no doubt that marketing is important. It needs a big budget, and we’re not going to argue against that. But there are always ways to cut down the cost. For instance, you can set up social media marketing yourself. Do this, and there’s no reason to hire an expensive pro promoter.
Or what about by being too old-fashioned. Many business owners are too stuck in their ways and lost in past ideas. For instance, you can’t just ignore the fact that outsourcing solves a lot of issues. Outsourcing often receives a poor reputation. It’s generally associated with creating unemployment in a local area. But this isn’t really true. Outsourcing is now also necessary because businesses must keep costs low. It’s a sure-fire way to do it without necessarily losing the quality of the product or service. Although business owners do need to be careful when selecting an outsourcing company. They must choose someone who can be trusted. Otherwise, this is another issue that could damage the business’s reputation. Luckily, there are plenty of sites online that will tell you what outsourcing companies are reliable.
As you can see, then there are literally countless ways that business owners waste money. You don’t want to fall into that trap with your business. Dodge these disastrous ways to waste your funds, and you can limit the chances of a business failure. You can keep your business competitive and profitable for years to come!
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