3 Ways to Protect Your Small Business

Small Business

Taking on the task of building a business from the ground up is challenging to say the least. Between navigating finances, building business plans, and everything else, it can be difficult to get things off the ground. And, once your business takes off, you’ve suddenly opened yourself up to a myriad of potential liabilities. Here are five steps you can take to protect yourself and your small business.

1.   Insure Your Business

The best way to ensure that both you and your small business are protected is to insure. Every business, regardless of size, should have liability insurance. General Liability (GL) insurance, also known as Small Business Liability insurance, grants you and your small business protection against liability claims from anyone interacting with your business. This typically includes things like bodily injury, damage to property, or personal injury. And, is especially important if you have a storefront that could be damaged or other space where customers and patrons could injure themselves.  

Small Business Liability insurance protects you from a range of potential pitfalls, but it might not be the best fit for everyone. For example, freelance workers or online businesses typically do not need to worry about a customer potentially injuring themselves in a storefront. However, they do need protection against other possibilities. Small business owners also have the option to purchase liability protection for their contracts. In this case, the insurance would protect you from outlying complications, such as a holdup in a supply chain or act of nature, that prevents you from fulfilling your side of the agreement. 

2.   Separate Yourself From Your Business

One of the many reasons people love supporting small businesses is the unique ability to communicate directly with the owner. It allows you to connect with your customers and it makes them feel they are getting an experience tailored to their needs. But this face time can present problems, especially if you operate your business as a sole proprietorship. Sole proprietorships offer no separation between your personal assets and the business’ assets. This means that should a lawsuit be filed against your business, your personal finances could be at risk.

One way to protect yourself from this is to have your business run by a trust. A trust is a legal entity that typically files its own separate tax returns and can hold its own assets. When correctly set up, if sued in a court of law, only the assets owned by the trust can be attacked. However, the best and easiest way to do this is by incorporating.  When a company incorporates, it becomes its own legal entity separate from the individuals who founded the business, thus protecting your personal assets from attack in court. You can do this by setting up an LLC or by forming a corporation. Each option offers its own benefits, so if you need help deciding which is best for you and your business, reach out to the experts from BetterLegal and get a $30 off their services.

3.   Protect Your Files

This may seem obvious, but take the extra step to protect your files. These days, most businesses primarily store their files online, in some kind of cloud or similar software. But be wary, not all storage options are safe and secure. Protecting not only your business information but your customer’s personal information should be paramount. In addition to updated anti-virus software, take extra precautions to ensure that any cloud (or other) storage software you’re using has the necessary security measures.

You should also have a backup of all your files stored in a completely separate location. For this the best options are either a hard drive, physical copies, or a combination of the two. If you do decide to keep physical copies of your files, use a secure and fireproof storage method. If you take all of these steps, all your sensitive information will be protected from disasters both physical and technological.