In business, some amount of risk is to be expected. That’s the kind of risk involved in competing with the market and making sure you’re getting the right impact with your target market. There are other risks, however, that are entirely unacceptable. Risks that waste your time and money without any involvement from the market. It’s these risks that can make even a great investment idea turn into a total loss. So here we’re going to look at ways you reduce the risk to your business.
Inefficiency
Time is money, as they say. For no-one is that more true than a business owner. You’re paying salaries and overheads on all of this, so you need to make sure that your money is being used in the most efficient way possible. For example, you need to consider whether certain parts of the business need a hire or could be outsourced instead. Similarly, be open to getting app heavy with your business. This way, you can automate as many tasks as possible, leaving more time for you and your team. Get rid of the idea of multitasking, too. Instead, train people to ‘single-task’. That is, to take things one at a time and get them done before letting the next thing pop up.
A morale deficit
The best way to make employees more productive is to make sure that their morale is in a good place. People who aren’t engaged in their work are not very likely to be giving it their all. There’s another serious risk when it comes to unhappy employees, too. That is the risk that your business is going to have a big employee turnover rate. There are still a few businesses that keep a model of making employees more expendable. However, when you factor in the costs of rehiring and retraining, it’s clear that this isn’t a tactic that’s feasible in the long-term. Value your employees. Train them. Address their concerns. Make sure that their morale is important to your vision for the business.
Distraction
If morale is what helps employees work more efficiently then distraction is the bane of getting anything done. Not just for your team but for you. As we’ve said, taking things one at a time is important. People need to prioritize tasks so they don’t get caught up with every new thing that comes up. But you need to deal with internal distraction, as well. That is, distraction caused by the employee themselves. If someone isn’t engaged in their task, then you have to find the root of why. They might be better suited to another role. Or they may just be prone to spending too much time on the internet. Either way, the solution is simple. Find a more suitable role or block them from using those sites.
A hole in your wallet
Employees are also a factor in making sure that you stay on top of your finances. But they’re only one factor. Every business needs to have an organized approach to how they deal with their finances. It’s not enough to deal with them as they come. Set up a system, physically and electronically, for all the different elements of bookkeeping. Expenses. Invoices. Overheads. They should all be kept separate. Automate your payroll services so that you never fall behind. Take an overview of your costs every two weeks to see what might need to be cut down. Otherwise, you may be losing money faster than you realise. Apps like QuickBooks can make it even easier to organize your finances.
Bad hires
If you want something that’s going to waste a lot of money and time, then just hire the wrong person. A lot of businesses focus so much on the skills and looking for the ‘right’ points that they miss all the ‘wrong’ ones. For one, you need to keep an eye on toxic behaviours. These include things like too much negativity or showing very little ability to work in a team. You can spot these in the interview process. One of the best ways of doing it is by organizing pair interviews. If a candidate spends all their time trying to denigrate their ‘competition’, it shows a pettiness that doesn’t belong in the office. Look for other ways to identify those factors that might show that employee to be exactly the wrong person for you.
Inflexible demands
When you do have a good employee, you want to make sure that you keep hold of them. It’s important, as the employer, to know when to loosen the reins a little. Know when to show a bit of give-and-take when it comes to working conditions. For example, you should be open to using remote workers. Not only can it help you cut costs in the office. It’s long been accepted that fears over the impact on motivation and productivity are unfounded. In fact, more often the opposite is true. A lot of people find it a lot easier to work from their own home.
Predatory competition
Of course, there are plenty of external threats to your business, as well. It’s not all down to your management practices. But even those external threats can be managed. When it comes to competition, a certain level of threat is acceptable. If you can beat them on the market, then it’s acceptable. What isn’t is having the signifiers of your business taken from you. We’re talking about your name, your logo, and everything else that makes up your branding. Yet a lot of competitors will try to take these from a successful company. This builds your competition as well as damages your brand. Learn how to protect your intellectual property. Otherwise, they might beat you to the punch and make it impossible to protect in future.
Health & safety
As an employer, you have a lot of responsibility to take care of. One of the most important of these is health & safety. Keeping your employees safe is just obvious for anyone who has a shred of concern for other people. But it’s also necessary to avoid some of the hefty costs that businesses can build through compensation costs. Health & safety is all about identifying and eliminating risks in the office. For a start, you should be looking at fire risks and how you eliminate them. Then make sure that the office is kept clean and safe, that there’s no clutter that could pose a tripping risk. Appointing a safety officer, even temporarily, can be a good way of learning the different risks in your workplace.
Disputes
There will be arguments and disagreements anywhere that more two people come together. That’s just a truth of dealing with people. However, there are friendly disagreements and then there are serious disputes. If you don’t have a legally compliant, structured approach to dealing with disputes you could be in trouble. People could get into the processes of litigation, blaming you for distress or wrongful termination. You need to make sure that your business is protected from any of those sorts of claims. The best way to do that is by creating a code of conduct and a structure for dealing with things. Visit Ellis Whittam to find out more and protect your business from disputes.
Having no protection
Naturally, you can’t cut off every risk at the pass. Sometimes, you just can’t see something coming. People can hurt themselves or you could be involved in litigation. Otherwise, you might have a fire or natural phenomena might cause damage to business property. You might even be a target of crime. You need to prepare for those risks by taking a look at what kind of insurance might help you better protect your investment. Sort those risks from the most likely to least likely. That should serve as a guide as to where your budget for insurance is going to go. You don’t want to spend too much on risks that just aren’t going to happen. At the same time, you can’t afford to skimp out on it.
An unsecured future
One risk that you might not even consider a risk is that of growing the business. Yet businesses that take an unorganized approach to scaling will quickly find that there are plenty of ways it can go wrong. Not having the resources to scale properly or the plans on how to use those resources can stop your progress dead. You might find that you’re spending a lot more on new staff than you need to and quickly draining your finances. Or you might find that you don’t have enough money for the tech that is integral in your new expansion. You need to take the time to thoroughly plan an expansion. You can’t wing it.
Preparation and protection is the way forward when dealing with risks. From insuring your business to making sure that you’re complying with all the standards expected of you. Just make sure, no matter what you do, that you don’t try to ignore the obvious risks that do exist.
