More people are opting to start up their own business, and with the changes in consumer activity with the new millennial generation, it is a good time to open a small business to support your local economy and to make a living on your own terms. Diving into this water is no easy feat, and there are a lot of dangers to look out for.
Starting a business is very expensive, and often the property from which you run your business and the holdings kept within it's walls are your most valuable asset, particularly if you have been saving for a long time to begin your company. Therefore, it pays to have a decent security system in place to protect your business. It's also a good idea to take out some form of insurance against theft and damage. You may not have much money to afford such luxuries, but you will be very thankful you took out that insurance policy if anything were to happen. It is best to prepare for the worst case scenario.
Extreme weather can force a business to temporarily close due to a lack of customers being able to travel to the business or for safety reasons. Statistics show that 40% of small businesses fail to reopen after a fire or a flood. If your business is located in a disaster prone area, make sure you have a strategy for continuation if something were to happen.
Small businesses don't tend to have that many staff, and if too much of your business relies solely on one person, then if they become ill or decide to leave for whatever reason, it can have serious ramifications to your business. Make sure you do not depend too much on single employees.
Creating contracts for employees has become standard practice and is expected in most businesses, however a lot of small businesses don't have the time or the funding to properly proof read everything that they are signing and all of the terms and conditions and the potential legal ramifications it could have against the business. This can be a big risk further down the road with potential legal action taking large sums of money from your business. Paying a lawyer or an expert to thoroughly evaluate your contracts is a difficult and expensive decision to make, but in the long run it could save your business from going bust.
Much like relying on one employee, if you rely too heavily on one supplier, this can also be a huge risk. Make sure you have a dependable supply chain with alternatives in case of any emergencies to ensure continuity of your business.
There is a big threat of hacking, phishing and the compromising of data, and with the expansion of the internet, this is only going to increase. While costly, protecting yourself electronically and protecting your data can be as valuable or even more valuable than protecting your physical assets, depending on the business that you run.
When opening it is hard to know what you can shave costs on, however to ensure that your business survives the first and most difficult year, biting the bullet and preparing for a worst case scenario is often the best thing you can do.