There are over 31.7 million small businesses in the US, and this number is increasing drastically. As you know, there are many benefits to owning your own business, but that doesn’t mean there are no risks involved. These threats exist regardless of the industry you’re in. That’s why you need to be able to identify these threats and have a plan in place to prevent them.
In this article, we’re going to discuss some of the main threats to small businesses. Let’s begin.
Top Threats to Small Businesses
The following are the top threats small businesses face daily and how you can avoid them.
Data Breaches
A vast majority of small businesses don’t have sufficient tools and protection in place. Oftentimes small businesses don’t have an IT team so they’re more at risk when it comes to these attacks as well.
If you aren’t taking basic security measures as well as additional precautions you could be at risk. One way you can get added protection in your fight against data breaches is by getting cyber liability insurance. This type of coverage will protect you against cybercrimes where sensitive information has been accessed. Dealing with this issue without insurance can be financially damaging.
Therefore, to combat cybercrimes you should have the necessary coverage in place and take proper safety precautions. Data breaches can be very expensive and damaging in the long run, especially for small businesses.
Property Loss
You should always invest in commercial property insurance for your small business in case a loss occurs. Commercial property insurance protects your business from theft, vandalism, water damage, fires, and more. If a disaster were to occur, you can be left paying for the damages if you don’t have insurance. Therefore, to avoid any financial burdens, you need to purchase the necessary coverage.
Moreover, if you run your small business in your home, then you still need separate coverage because your home insurance won’t cover any damages to your business.
Employee Injury
Regardless of the number of employees you have, you need to have workers’ compensation insurance. If an employee were to get injured while on the job then you’re obligated to pay their medical bills and lost wages.
Thus, you should enforce safety procedures and prioritize your employees’ health and well-being. In addition, you should also offer flexible hours to these employees, to ensure they aren’t overworked. These suggestions can lessen the chance of an employee getting injured and needing to file a workers’ comp claim.
Business Interruption
Several unforeseen factors like a fire, flood, or earthquake could close your business down for months. It will not only impact operations but will cause thousands in lost revenue and damages. This can financially ruin a small business to where they’re unable to recover.
Therefore, it’s important to be insured in case your business is interrupted. With the help of business interruption insurance, you’ll be reimbursed for lost income due to a disaster. With this money, you’ll be able to recover and continue to pay your employees until you’re able to resume work.
Bottom Line
Running a small business requires you to stay extra vigilant. This is because most small businesses cannot bear any sudden and detrimental losses. Therefore, you should ensure you have sufficient insurance in place against business interruptions, employee injury, property loss, and cybersecurity threats. These simple steps will help you keep your business afloat and keep things running smoothly for a long time.
Source
https://www.blog.consultants500.com/entrepreneurship-and-freelancing/4-biggest-threats/