Certain successful businesses such as Walmart, Colgate, and Macy’s seem like they have withstood the test of time and will continue to be around for decades to come. However, this accomplishment is more of a rarity than a commonality for most businesses. According to a study done by Mckinsey, big companies used to have an average lifespan of 61 years and that number has dramatically decreased to 18. One reason businesses fail to last is the lack of planning for unpredictable problems and emergencies. Cyber attacks, outages, pandemics, and freak storms are just a few problems that could negatively impact businesses in a major way. Even though issues could happen at anytime, we came up with six ways to protect your business against unforeseen problems below.
Boost Your Security
Consider boosting your security systems if you would like to protect your business. Implementing security systems and/or employing physical security could prevent break-ins, damage from riots, help separate staff when things become heated in the office, and more. You might want to incorporate biometrics and/or ID scans to protect sensitive data from getting into the wrong hands. Also, consider installing surveillance systems such as cameras to watch your premises, protect your employees from harm, and protect your business from theft.
Back Up Your Data
One of the easiest and most simple ways you can protect your business is by updating your data on a frequent basis. You should back up your data on a periodic schedule, preferably weekly or even daily in the event of a fire, software failure, a cyber attack or data corruption. You can store your data at a couple of alternative physical locations, back it up on hard drives or utilize a cloud-based service. Frequently backing up your data and coming up with a reliable data recovery plan will help ensure your business continues running smoothly for years to come.
Business Interruption Insurance
Business interruption insurance helps pay for income loss and various expenses in the event of a disaster such as a fire, vandalism, or storm. According to Allianz, fire/explosions accounted for 59% of 1,807 business interruption claims filed globally over a five-year period. Business interruption insurance helps pay for relocation costs, advertising, mortgage/rent, building maintenance, employee benefits, payroll, various bills, and more. Business interruption insurance doesn’t cover floods, earthquakes or a business closing due to a pandemic such as COVID-19. Business interruption insurance usually lasts for 12 months, but can be extended another year depending on the policy.
Create A Financial Buffer
Consider creating a financial buffer to protect your business in the case of an emergency or crisis. Set aside a cash reserve and try to build a separate source of capital overtime. This doesn’t have to be done overnight, and you can always reduce unnecessary business expenses to help accomplish this goal. You can sell unused assets or old stock, conduct periodic inventory audits, reduce raw materials, and scale back certain departments to streamline this process.
Several different types of disasters can happen at anytime, so it’s important to perform a thorough risk assessment for your business. Take time to assemble a team who will identify and analyze potential hazards within the physical location of your business. Figure out the number of threats to your business and document them, so you can come up with contingency plans.
Physical Asset Protection
Enhancing your physical asset protection is an often-overlooked way of protecting your business. Invest in a backup generator in case of a power outage or extreme weather conditions. Secure heavy objects and consult an electrician to make sure outlets/wires are a healthy distance from water damage. Flood-proof your equipment if you’re in a flood zone or the building is prone to water damage. Make sure computers and electric equipment are a good distance from large windows in case they break, or hail comes through.
Starting a business is relatively easy, but finding ways to keep it running can be a challenge for many, especially with the possibility of unforeseen problems always on the horizon. To combat this issue, there are several different strategies you can employ to protect yourself and the future of your business. Consider boosting your security and enhancing your surveillance systems. Follow this up by building up a financial buffer for times of crisis and back up your data in a secure fashion. Business interruption insurance may be one of the most vital options on this list because of its ability to protect you in case you experience a disaster and the extra layer of financial security that comes with it. Conduct annual risk assessments to identify potential hazards and strengthen your physical asset protection to cover all of your bases. Follow these six ways of protecting your business above, and you just might become the next long-lasting business to stand amongst the greats.