How to minimise risk at your physical business
As a business owner, your job isn’t just to make profits and beat competitors. It’s also to find ways to minimize your risks.
You’ll notice that as you set up your brand that you earn money slowly but then lose it quickly. Unfortunately, that’s the nature of exposing yourself to large downside risks. While they’re rare individually, there are actually quite a lot of them, and they can affect many aspects of your operations.
So, below we present a practical, no-fluff way to reduce risks in your business. These are ideal if you have a brick-and-mortar premises or you run fleet operations with workers in the field.
Get the right insurance
Your first step is to cover yourself with insurance. In the UK, getting cover is going to provide you with more protection than almost anything else. Insurers will usually pay out for non-criminal losses (or losses where third-party criminals committed an offense that affected you).
You should start with general liability insurance. This covers you against people hurting themselves on your premises, or you doing something negligent that results in harm. Just make sure that the level of cover is seven or eight figures, just to be on the safe side. The extra cost is often negligible compared to the risk protection.
If you sell products, then add product liability protection. This insurance protects you if your products wind up hurting someone and they decide to sue (something that is more common than many brands think).
If your business is at risk of interruption, it’s worth adding interruption insurance, too. These policies cover you from sudden loss of income due to something unforeseen, like losing your cloud access or the power going down.
If you have a mobile business or run vehicles, van fleet insurance is a must. This special type of insurance gives you a lower cost per vehicle, allowing you to keep more of your fleet on the road with fewer first and third-party risks.
Finally, make sure you review your coverage levels every year. You may find that you need additional policies as your business expands or you branch out into new activities, so always be aware of these.
Choose low-risk locations
Next, think about how you can reduce risks with your location. Many businesses simply flock to the cheapest areas, but this is generally not recommended. You need to balance the price today with the costs tomorrow if you get the location wrong.
Therefore, start by prioritizing low-crime areas. Get a map showing crime hotspots in your area and then work to avoid these. Look for regions of your town or city where other businesses are setting up as this is a good sign of what they consider safe.
Also, you should be able to obtain flood maps for any location in the UK. These show you where flooding is likely to happen based on local maps, or where it has happened before. You should be able to see things like fire service response times and police callouts.
If you can negotiate a personal-guarantee-free lease with the landlord (if leasing), that can provide even lower risk. This way, your private money isn’t on the line if the business doesn’t turn out to be as successful as you hoped.
Be obsessive about slips and falls
Slips and falls are a big issue for many physical businesses. The moment people show up, the risk of them tripping over suddenly becomes a problem for you.
Therefore, take mitigating measures from the start. Make sure you install things like handrails and good lighting. Always put down a “wet floor” sign every time there’s a spill. Then, commit to regular audits and inspections to ensure you’re following best practices.
After that, document daily cleaning and maintenance logs. If you have these records, it can act in your favor in court. If judges can see you’re taking the effort to really look after your premises, that can encourage them to see you differently and perhaps be more lenient in slip and fall cases.
Lastly, make sure you train every employee on trip and fall issues, not just the cleaners. Get them to be as proactive as you possibly can, taking responsibility into their own hands for the state of the corporate environment.
Secure your intangible valuables
You also want to secure as many of your intangible valuables as possible. Making sure you’re protecting your cash, inventory and data is critical if you run a physical business. These are often high-value items that impoverish you but enrich criminals.
For cash, use safes and security cameras. These make it much more challenging to take any cash on your premises without getting caught. Also, move large amounts of cash around in a secure van. Don’t just use your private vehicle.
For data, get a managed security service provider (MSSP). These can monitor your business’s network and systems in real time, checking for any issues or red flags. Many companies find these indispensable because they reduce the work they have to do.
Hire slowly and fire quickly
Another way to reduce risks is to hire slowly and fire quickly. Most thefts actually come from people you’ve hired, not regular criminals. Therefore, you want to keep an eye on these individuals and remove them as soon as you notice any stealing. Also, you’ll want a zero-tolerance policy where you prosecute all thefts as an additional deterrence.
If you want to reduce risks, check the background of the people you employee with criminal record checks. These should flag anything they’ve done wrong (including past employment verification and issues relating to their previous work).
Turn everything into a system
Finally, you want to turn everything your business does into a system. The more you can automate everything, the less likely the loss of a single person will affect you.
What you don’t want is to be utterly reliant on one person. If they leave, you could find yourself in a world of pain and unable to continue with your business activities.
