Year End - Do You Know Where Your Risks Are?

By Benecia Beyer

We are coming up on year end and it's only natural to start thinking about conducting a review of your business to get ready for the new year ahead. Most people automatically think of reviewing taxes - and that's it. That's good - but that's only a small piece of the liability picture. You need to look at more.

As a small business owner, your personal assets may be at risk in the event of legal liability or even a downturn in your business. Some of the risks you should be evaluating are:

• Economic and business environment risk - Look at external market conditions. Has anything changed or is it likely to change, in such a way to impact your cash flow, receivables, profit margins or customer orders? Has there been any major change in your suppliers or the competition? If you need to tighten your belt, it is always better to know sooner rather than later. You want as much time to plan and react as possible.
• Human resource policies - Are your polices up to date with current legal requirements? Are they in line with the marketplace? The employer/employee relationship is constantly evolving. If you haven't looked at your HR policies for the past several years, something is bound to be inaccurate when compared with the way you actually run your business today.
• Employee benefits - Evaluate your employee benefits plans for competiveness and also for costs of coverage. Employee benefits are a fluid and ever-changing area. It is rare for everything to remain the same from year to year.
• Environmental liabilities - Are you aware of the complex environmental laws and regulations that may affect  your business? Are your internal procedures in compliance? When was the last time you checked?
• Liability and property insurance - Are insurance coverages sufficient? Have they kept up with changes in your business? Be sure to look at both types of coverage and the amounts. New exclustions from coverage and your prior year claims experience may require adjustments.

Here is a good read regarding business guide to risk management.  It's even in a pdf format so you can print and take with you to read while you're waiting somewhere with nothing to do !

Comments

[Yvonne DiVita]

Benecia, this is a good post. One that more small business owners should read. The issues you mention weren't even on my radar, when I started my business almost 5 years ago. Now, thanks to DiVita Inc. I am much more aware. Thanks!