Lessen the risk of your business running into financial trouble.
When you’re running a business, it’s easy to get caught up in the day-to-day duties that distract you from making sure your business is protected. As with anything in business, it’s all about balance. You must be able to balance threats with opportunities or at least take proactive measures to reduce those threats.
Threats to your company can come in many forms, from cyber risks to conceptual failures to real physical consequences. Some of the most dangerous threats are financial, seriously impacting your business’s bottom line.
As you develop your business, be sure to avoid these major financial threats.
Losing a Major Client
Every business has that one client. There’s always one (or if you’re lucky, a handful) that always come back for business with an unrestrained wallet. You know that if you were to lose that client or clients, it could spell disaster for your company in a matter of months. The easiest way to prevent such a potential disaster is to strategically build your customer base. Ensure that your business has a formally drawn-up contingency plan that enables you to cut expenses or change strategies should your revenue disappear.
Poor Cash Flow Management
Any business owner knows to keep a close eye on the cash flow. What businesses do want is to have a bottom line that shows a profit, but in order to do this, they must actively manage their incoming and outgoing cash so that their bills and employees are paid without the entire operation taking a hit. It may be possible to negotiate terms with vendors and suppliers and only pay bills on the day they’re due. Additionally, you could give limited terms to your customers, send out invoices early, and ensure follow-ups are sent out periodically. Most, if not all, cash flow problems can be corrected if caught early.
Legal Problems
It may be that a disgruntled employee has exaggerated scenarios with a lawyer. It could be an unhappy customer. It could even be copyright or patent violation. Whatever the case, there’s a very real possibility that your business will face some type of legal action at some point during the course of its development.
To prevent the possibility of your company’s bottom line suffering, be sure to put these prevention tips into place. In addition, safeguard your business, should it fall victim to such attacks with reliable business insurance. Contact CAV Insurance, serving Wellesley Hills and neighboring cities in Massachusetts.