Wondering how you can protect investments that you have made as a business owner?
Successful entrepreneurs all over the planet have one skill in common. They came up with a brilliant business idea that hit the market just at the right time. Their idea responded to the emerging demand of a new audience group. You could say they got lucky.
Look at businesses such as Facebook or Apple. They both saw an opportunity in the market and seized it to maximise their growth potential. Yet, the idea is the easiest part of a business venture. More entrepreneurs would agree on this. Everyone can have ideas, but it’s initiating them that’s the hard part.
Everyone can have ideas. Similarly, everyone can launch a startup after securing a business idea. But between the creative inspiration and the success of a growing company, there’s one essential step that differentiates the business that is doomed to fail from the one that has the potential to do well.
A business, despite supporting a mission and creating a community of loyal customers, is above all an investment. It’s a financial bet that entrepreneurs and lenders make on the survival of a company. If the company makes it and grows, you win the bet and a generous dividend. If the company collapses, you lose the bet and your money. So what can entrepreneurs do to protect investments?
Assess the risks
First of all, with any investment comes a variety of risks. These risks could be a million different things that could go wrong. Whether it’s a delay in delivery or a mistake in the production, when one thing falls out of place your company can be faced with the threat of bankruptcy if you fail to protect it appropriately.
That’s precisely why insurance is crucial in the business world. To begin with, it’s helpful to sit down with a company expert and assess the risks within your business. These risks can be related to the location of your business – especially if this location can be exposed to natural disasters – the quality of your products and services, the safety of your staff, the protection of your brand and business ideas, etc. You can’t build a powerful company if you don’t consider protecting all your assets first.
They maintain an open communication when things go wrong
Mistakes happen, regardless of how much you try to avoid them. It’s a common rule of the business world. You’ll do something wrong. I know I have in the two years I’ve been running Sarah Macklin Editing. And it’s fine, as long as you are ready to own up to your mistakes.
For entrepreneurs, it means delivering a sincere apology and learning the lesson. It doesn’t matter whether the error impacted on an employee, a customer or a partner. For partners and customers, you can also consider an additional offer, such as a free product, a discount, or free services.
When your company messes up in the eye of the public, you will need to produce a public mea culpa. The worst thing that can happen to your company is to ignore the mistake you’ve made.
Your customers have a long memory, so it’s essential that you keep a clear and honest communication with them, especially when you’ve done something you’re not proud of. As the adage goes, you can turn your lemons into lemonade if you communicate openly, efficiently and sincerely.
They trust experts
While a freelancer might choose a DIY approach to most administrative tasks, entrepreneurs need to rely on experts to maintain a professional look and feel. The risks of errors in corporate tax returns are high, and the repercussions can be devastating.
You should let the experts do their job to ensure everything runs smoothly. This means you can get on with other important tasks. You should consider hiring a company to manage your finances, HR, legality, and IT. It means you don’t have to worry about these aspects of your company.
They look for financial recovery when mistakes happen
When you hire an expert, you trust that your assets are protected by them, and in good hands. However, mistakes can still happen. The risk of it is low, but experts can still get things wrong.
If their mistake has almost no consequences, you should put strategies in place to stop it from happening again. However, if the mistake has caused damages to the company, solicitors recommend making a professional negligence claim. This ensures you can recover from whatever was lost.
A claim can be made in the following areas: accounting, financial advising, insurance broker services, and legal advising. Other elements such as IT maintenance and anti-hacking solutions are also receiving a lot of attention.
They follow a strict financial strategy
Growing a business means growing the volume of assets available. For a lot of business owners, the most important question regarding assets is whether to own the asset in-house or to borrow it for an extended period of time.
The company could decide to hire someone permanently. Failing that, a freelancer could be outsourced or contracted for a specified amount of time. It depends on the availability of the market, and costs. Either option is valid, but work out which one is better for you.
Equally, you can lease furniture, machinery and specialist tools. Leasing can be a profitable option in terms of cash flow, but buying means the asset can be used as security. You might also want to consider that you could claim back VAT when buying the item.
Understanding the current and future needs of the company is key to investing in the right asset at the right time.
They run a regular market analysis
Ultimately, a business is one of the multiple players on the market. The entrepreneur needs to a thorough understanding of the opportunities, risks and innovations currently available on the market. This may define the strategy for the future of their business.
Without a market analysis of the political, economic, social, and technological transformations at hand, it is impossible to establish what the company has to do to maintain or grow its revenue.
In conclusion, every business starts with an idea. But the entrepreneur needs to see further than this. They need to maximise risk assessment so when things do go wrong, they can solve them. They need effective communication and management if they’ll be taking on staff. The business owner will need to be able to make decisions and know the effect they will have on the company. They need to have long and short term goals. They need to be able to protect investments. And they need an understanding of their market in order to create success.