Small businesses are often plagued with many different kinds of risk, big and small. Although some risk is simply unavoidable, many times you can influence how much you are exposing your organization to negative effects and can make sure that it’s the least amount possible. Ensuring long-term employees, minimizing security risks, controlling and properly managing your finances, and remaining flexible at all times are just a few crucial ways you can help your small business reduce risk.
Reduce Employee Turnover
Having high employee turnover can really hurt your business financially, but it can have other detrimental effects as well. According to a study conducted by The Work Institute, it’s estimated that the cost of losing a single US Worker is roughly $15,000. As voluntary turnover increases (i.e. people quitting their jobs), so does the expenses of a business. This can become a larger factor especially in environments that typically have a high turnover rate, most commonly in retail. In addition, employees leaving can have a compounding effect with the likes of a decrease in productivity, and all the costs and complications that arise with hiring and training a replacement.
Employees leaving a business can have a prolonged effect on the company as a whole. The loss of knowledge in general, not to mention a member who was already ingrained in the culture of the business can often be hard to replace, especially in a timely manner. This can have a negative effect on your business in both the short and long term.
Try utilizing an employee advocacy program to help increase employee engagement, and make sure that you are empowering your employees through active and genuine engagement with the community. Employee advocacy programs can help boost internal communication across teams, create fun and light-hearted competition between coworkers, and help spread brand awareness.
Prioritize Cybersecurity
Although there are many ways to improve your company’s technology, one that is often overlooked is improving your cybersecurity programs. Cybersecurity has always been important, but at this current time, it’s almost a requirement. A CNBC article discussing cybercrime mentions that the number of cybersecurity attacks has “increased 273% in the first quarter, compared to the same time last year.”
Becoming the victim of a cybersecurity attack is a huge potential risk to your business, and can jeopardize a number of assets such as:
- Hackers can gain access to your financial information and use it for their own personal gain.
- They can gain knowledge of private business information and expose it.
- It can cause serious damage to the reputation of your business, hurting your future earnings.
- Outside threats could locate the information of your employees, such as social security numbers or private banking information.
Reducing the likelihood of a cybersecurity breach is imperative. You can protect your business by enacting strict cybersecurity guidelines for all employees, keeping all of your systems updated and protected, and by investing in cybersecurity solutions.
Monitor and Control Your Finances
Many small business owners prioritize their finances as one of the most important aspects to protect, which is true, but they might not think of how they can have their finances work for them. Keeping track of your financial situation can better help you plan around potential risks, and help create a roadmap for the future of your company.
When planning around your current finances, make sure that you always have enough liquid assets to cover all of your current liabilities. Once you’ve covered this, while keeping in mind your vision down the road, find different ways to invest your hard-earned money. Sitting on a great deal of capital can only hurt you in the sense that you are not taking advantage of all the potential interest that it could be earning you.
Depending on your level of risk and your timeline, diversify your investments to help reduce any investment risk and help to grow your assets. There are a lot of smart investments to grow your business out there, so be sure to find the ones right for you.
Remain Flexible
Many businesses are so hyper-focused on their own plans and how to execute them that they become blind to the numerous other factors and risks that are at play. Ensure that you have a strong foundation as a company and are aware of your objectives, but understand that things change and must be accounted for. The current global pandemic is, unfortunately, a good example of things going awry. Many businesses were unable to adjust to the work-from-home aspect or the additional regulations and had a difficult time moving forward.
For many businesses, investing in cloud technology can help your businesses adapt to a considerable amount of changes. It can aid in remote work by allowing access to all your files regardless of your physical location. The cloud helps with the sharing of documents between team members who may be in different places. It also allows you to back up your data in case of emergencies or accidents. Understanding that the unexpected can happen and planning for some aspects of it will put you further ahead of your competition than most.
Risks are a part of all businesses, and although it’s impossible to eliminate them, it is important to mitigate them to the best of your abilities. Aim to reduce your employee turnover in order to save your company money as well as building a strong team culture for the future. Invest in cybersecurity options to help protect your company’s assets and reputation. Ensuring that you put your finances to work for you can help bolster your long-term success. Expecting the unexpected and remaining flexible to potential turmoil can help you retain a solid footing in an unsteady environment.