3 Common Examples of Modern-Day Business Risks and How to Manage Them
In business, everything that can go wrong will likely go wrong. That’s why about 70 percent of small enterprises fold within a decade.
One of the biggest reasons most businesses fail is that they struggle to overcome the risks they face. As an entrepreneur, it’s your responsibility to identify these business risks and find effective ways to prevent or mitigate them.
In this article, we’ll flesh out some of the most common company risks you’re likely to face today and what you can do about them.
1. Cybersecurity Breaches
Th internet has revolutionized how we do business, but it’s also exposed enterprises to a deadly risk. In today’s digital world, about 30,000 websites are hacked every day, with close to 50 percent of these attacks targeting small business websites.
Even if your business doesn’t have a website, it’s still vulnerable to attacks. Hackers can breach your internal network and other digital systems and steal confidential data.
Cybersecurity breaches are so deadly that 60 percent of attacked businesses close shop within six months. That’s because the cost of a single breach is in the region of $4 million, and many small enterprises simply don’t have the financial capacity to overcome a breach.
Prioritize your business’s cybersecurity. Invest in firewalls, use strong passwords, and train your employees to raise their online security awareness.
Also, it’s vital to buy cybersecurity insurance so that you’re shielded from the financial risk of a data breach.
2. Remote Work
Although the COVID-19 pandemic is gradually becoming a thing of the past, its effect on businesses is still fresh. During its onset, many businesses were forced to adopt remote work. The transition wasn’t easy and it caused great business disruption.
A few years later, a new challenge is emerging: workers who don’t want to return to the office. A recent survey found that 64 percent of remote workers in the U.S. would rather quit than return to the office.
As a small business owner, perhaps you know that your business is most efficient when employees are in the office. Yet, you cannot risk losing most of them if you’re trying to enforce a return-to-work policy.
Replacing an employee costs a lot of money, and with the current state of the labor market, finding good talent isn’t easy. You might have no choice but to allow remote work, but you can also take a hybrid approach where your employees work from home at least some of the time.
3. Liability Risks
Businesses are exposed to several liability risks, including general liability, product liability, and employment liability.
If you have a brick-and-mortar business, for example, there’s a risk that a customer could get injured in a slip and fall accident while on your premises. They can accuse you of negligence and demand compensation.
While there are steps you can take to minimize your liability exposure, such as eliminating accident hazards in your premises, the most effective solution is to purchase adequate business insurance.
If you’re a sole proprietor, a business owner’s policy will come in handy. This page for business owners insurance has additional information for you.
Business Risks Shouldn’t Be Your Downfall
Left unmanaged, most business risks will increase your overhead, hurt the reputation of your company, and eventually lead to its failure. You need a risk management strategy to deal with all the risks your business faces, especially the ones fleshed out above.
You can find more business tips on our blog. Keep exploring!
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