Some risks in life are inevitable, but it is best to minimize them as much as possible.
- Where appropriate, get insurance. Nothing will wipe you out faster than a legal problem. If you can’t afford insurance, don’t pursue that line of business until you can afford it. If you don’t know where insurance is appropriate you need to do some research. Remember that advice on the internet should only depend on official sources from insurance companies or government sites.
Some professions have large group insurance policies. Investigate this as the prices will be lower.
Remember, if the business changes the insurance might well need changing too.
- Selects a business structure where you have limited personal liability. Sole proprietorship will almost certainly leave you with personal liability; a corporation or limited liability company will give you much less trouble.
- Risk analysis. Evaluate where risk lie and look at alternate way to achieve the same results. If there is no alternate way, ask yourself whether the risk is justified by the benefits it may give. Avoid at all cost anything that is a risk to human safety, remembering that any product that can be misused will certainly be misused by somebody out there. Try to deal with products that cannot be misused.
- If something is high risk but still essential, try to have it outsourced to a group that specializes in this type of work. Find a group with the best safety record possible. Using outside experts reduces the risk of accidents, and transfers the liability to them.
- Give warranties and get as much customer feedback as realistically possible. Use this to modify products and production methods, making products as safe and reliable as possible. Replacing items/services under warranty benefits you reputation.
- If you have employees you need to let them know their limits and authority. You don’t want them spending significant money unless it’s a good decision that you approve of, or implementing production changes without your consent.
- Keep an eye on accounts and loans. Have an accountant if possible, and keep debt to a minimum. Unless you are making more money that a loan is costing you in interest you are probably making a mistake somewhere. Look at the changing tax situation. Every year there are a different set of regulation that can benefit a small business in some way. The 2015 year has added benefits for asset deductions.
