Imagine putting hours upon hours of hard work into online courses, perfecting a product, and creating meaningful content for your business, only to have everything you’ve worked so hard for, snatched right from under you. As a small business owner, you’ve worked very hard to build your success and because of all the hard work you’ve put in, you have to everything in your power to protect it.
Unfortunately, this happens to business owners more often than it should. Sure, business owners know and understand that theft, fraud, and legal situations happen but for some reason, they have it in their minds that it won’t happen to their business… as silly as that sounds, business owners have that mindset. It ‘s the business owners with that mindset that have the biggest threats against their business.
It’s this mindset that is the reason why so many businesses experience fraud. According to the FTC, more and more businesses, 1.4 million to be exact, are falling victim to fraud, and the majority of the time it’s because of failure to effectively protect their business. Instead of your business becoming part of the 1.4 million other businesses that have experienced fraud or some type of fraudulent activity, take the necessary steps to protect your business and your wealth. Take a look at some of the best business practices to protect and keep your business safe.
Best Practice 1: Get Your Business Insured Immediately
One of the first things you need to do once you have your business set up is to obtain business insurance. Depending on the type of business you have, will determine the type of business insurance you need. For protection against libel and slander, you’re going to need professional liability insurance. But if you have any third-party damages or suffer from bodily injury, you’ll want to obtain general liability insurance.
Business insurance is one of the first moves, if not the first move to make in protecting your business. Get your business insured and then take the other safety precautions from here.
Best Practice 2: Get a Separate Business Bank Account
One of the biggest mistakes that business owners make is not having a bank account separate from their personal bank account. By having your business transactions mixed up with your personal transactions, you’re putting your personal finances in great jeopardy.
What if your business is held responsible for some type of customer mishap and that customer decides to sue you for it? In situations like that, only your business should be held responsible but because both financials are intertwined, you’re financially responsible from your business but your personal funds are being utilized as well because your personal assets are tied to your business.
Best Practice 3: Take a Breather and Relax
This best practice is probably uncommon for most entrepreneurs. In running your own business, most entrepreneurs feel that they need to be running it all hours of the day… If you do that, that’s not going to give you any free time or time to de-stress and relax. When running your business, it’s important that you take time out to yourself to de-stress and unplug.
This aspect is so important because when you don’t give your mind time to unplug, it can affect your ability to focus and make important business decisions, and the last thing you need as a business owner is to have your decision-making process stifled. And to add to that, you’ve worked hard for your business… there’s nothing wrong with you taking a day or two off to recharge.
Best Practice 4: Buy-Sell Agreement
This is a business practice that is setting up your business’s future; it’s also a business practice that business owners have a hard time discussing. With a buy-sell agreement, you’re pretty much determining what will happen to your business in the event that you die or become incapacitated.
Sure, you have plenty much more life to live but it’s a smart business move to set up a buy-sell agreement now than later, and you want to do this while you’re able to have a say-so. Buy-sell agreements have a negative connotation but if you really look into what a buy-sell agreement really is, you’ll quickly see that it’s a protection plan for your family to be taken care of in the event that you die or are no longer able to take care of them.
Best Practice 5: Build Business Credit
In your personal finances, you’ve been advised time and time again to pay for things with cash and to steer clear of credit. Well, that theory sounds good but the reality is that to successfully run a business, establishing credit is actually a great thing.
There are so many business owners who have gone into debt with their personal finances trying to pay for business needs… you don’t have to do that. You can establish business credit for your business needs. Not only will it pay for your business needs but it will also help keep your business transactions separate from your personal transactions.