As business owners, we must protect our business in all aspects. This includes the product quality, brand image and trust of customers. Small to medium enterprises (SME) prioritise these because they are important in growing their businesses.
At the same time, protecting your business finances also plays a major role in your business’ success. Knowing how to handle your expenses and building a strong financial relationship should be part of any business plan. Sufficient planning can lighten tremendous financial burdens when unexpected events happen.
How to Have a Strong Financial Protection for Your Business?
Preventing any costly mistakes can protect any small business’ finances. Planning the financial protection for your business ahead of time can save you in the future. Here are some key things that business owners should focus on to make sure their business is well protected.
- Safeguard your Liability
Every business owner should have liability coverage to protect them from any claims from employees, customers and even from other businesses. Small businesses, unlike large enterprises, cannot take the risks of being sued by any entity. That is why business insurance is important. You need to be well-insured. Depending on what type of business you have and how big it is, there are various insurances that can shield your business from any risks.
- Secure your Business Data
Aside from protecting your physical assets, your business data should also be safeguarded. Data is important in present-day businesses and using them in the right way can give understanding on where your business needs to improve, how you should handle your cash flow and what strategy to use to market your products.
Protecting your data applies to every information about and related to your business. It can be your employee’s personal information, your client’s credit card details or your suppliers’ mailing list.
As part of your business plan, you should also include what actions to make if there is a breach in your data to save your business reputations and to appease your clients.
- Protect your Suppliers’ Trust
Whatever type of business you are running, it is likely that you are getting your products, parts or supplies from other businesses. And you have to gain and keep their trust to have a strong business relationship with them. Remember that you cannot grow your business alone. Some support is vital in making your business a success.
Without your suppliers, it is impossible to continue your business operations. So, make sure to always be updated with your invoices with the suppliers. This has the same weight as paying the taxes and your mortgage.
- Create Financing Options to Reduce Debt
In starting a business, in most cases, it is unavoidable that you incur debt. And in growing or expanding it, there will be a time that you will need help from a mortgage broker or finance broker to get additional loans from banks. Debts can get out of hand if not properly handled and monitored. If you take too many debts, regular expenses might not cover the repayments and this may lead to bankruptcy.
Having an alternative financing option, such as ‘receivables finance’ can be a way for business to reduce their debts.
- Protect your Cash
Many people still use cash in doing transactions. And unlike electronic payments, cash can easily be carried off without any trace. Many business owners use smart safes to protect their cash on hand. These safes can eliminate accounting errors by counting the cash from the cashier’s drawer and preparing the bank deposit.
It is not easy to run a business. Your livelihood depends on your business financial health. And failing to have strong financial protection can cost you your whole business, which is something you wouldn’t want to happen.
Doug Durie will not let that happen, too. With Doug’s guidance as your coach, you can build strong protection for your business.
Preventing Financial Failure is Avoiding Business Failure
Many owners of small to medium enterprises (SME) start their business with high hopes and dreams of expanding their business and gaining financial freedom. But running an SME is not that easy. There are many risks and unexpected factors that can test how well you handle your business.
Here are some tips on how to avoid business failures.
- Manage your cash flow efficiently
Cashflow means your costs versus revenues. This depicts money going in and out of your business. As business owners, you should micro-manage your cash flow. Many small businesses encounter cash flow issues. A starting business should make more revenues while limiting their expenses. Poor handling of cash is one main reason for many business failures.
- Build a Strong Business Plan
A strong business plan is vital for any business’ success. As the famous saying goes, ‘If you fail to plan, you plan to fail.’
Failure happens when you skip the planning stage. This plan shows the path your business should be focusing on. The path that will bring in revenues. Keeping a tight focus on your business plan will keep your business in the right financial direction.
Included in your business plan should be a contingency plan. If plan A didn’t work, proceed to plan B.
- Avoid High Debts
Financial support gain through loans is like a double-edged sword for a business. Many small to medium enterprises (SME) rely on a finance broker or some sort of credit to get more capital. It’s fine as long as you pay them on time. Disaster occurs once you encounter problems in paying those debts.
- Adaptability
As SMEs, it is important that you know how to innovate and adapt in terms of market and competitors. Always be on top of your game. Take sensible risks and go out of your comfort zones. Sensible risks mean you thought of them carefully, you weigh the options and the possible consequences and you test it first.
You will always encounter problems in running a business. That is unavoidable. But the important part is overcoming those problems.
