7 Key Steps to Protecting Your Business Finances

As you build up your small business, improving administration, product development, customer service, marketing and sales, you also want to make sure that you protect your company’s finances.

1. Get General Liability Insurance

General liability insurance is inexpensive, and can cost as little as $700 a year. In fact, in most states, every business is legally required to carry it. For that small amount of money, you will avoid unexpected financial loss from damage to your office building to crazy things like getting sued by a customer for falling down. If you think it’s unnecessary to get a high-level of insurance protection, think back on that famous case where McDonald’s got sued for providing hot coffee because a customer poured coffee on themselves.

2. Get Life Insurance

Another type of insurance that you want to think about is life insurance. With life insurance, you not only protect your family from financial loss, but you also allow the business to survive as it can still be maintained by a member of your family.

3. Consider Savings As An Overhead

Every business has unexpected expenses and unless you’re in the habit of developing a company savings account, you are running a huge risk. You should save a minimum of 15% of income, with some savvy companies saving as much as 40%. Consider this money set aside as part of your company’s overhead.

4. Be Prepared to Diversify Quickly

Remember how Blackberry dominated the cell phone market? Then Apple came out with the iPhone. Suddenly the iPhone, once the pride and envy of the telecom industry, was considered clunky and difficult to use. If Blackberry had more than just one product line to build their business around, they could have handled the sudden wave of change.

5. Hire a Document Shredding Company

Every business generates sensitive information. Yet there comes a time when this information becomes obsolete. For instance, an employee leaves, but his or her social security number and other sensitive information that could be used for identity theft if it fell into the wrong hands, is still on file. A document shredding company like Paper Recycling & Shredding Specialists can come in and securely and confidentially shred paper with personal or business information that no longer serves the company but could be damaging if it were stolen.

6. Know your Numbers

While you may have a bookkeeper or an accountant to manage your books, you should know what is going on. Many an entrepreneur has been shocked to find out that their books were not kept properly, taxes were not paid, or, worse still, the person in charge of the books fudged the numbers for personal gain! It is fine to delegate, but a business owner should not be oblivious about what is going on.

7. Offer Regular Education & Training

Unless you constantly make education and training part of your business, your staff will begin to fall behind on industry standards and make costly mistakes. Even if they don’t make mistakes, your business will start to become increasingly inconsequential when compared to other businesses that keep their staff up on the best business practices.

When you think about it, these seven steps are rather straightforward. For that reason, it's easy to dismiss them as mere common sense. Yet neglecting even one can actually ruin your business. Its better to take care of small things now before they become a big issue down the road.