Watch out for these risks that could affect your business’s profits.
If you’re a business owner, then you know how important your business’s bottom line is. Keeping your profits as high as possible is necessary for your business’s survival and growth. But what are the biggest threats that you should watch out for? Here are some of the biggest risks to your business’s bottom line.
1) Losing a Big Client
Most businesses have a few major accounts that generate the majority of their revenue. However, if you lose one of these big clients, then your business could take a serious financial hit. Even with contingencies in place, many businesses aren’t equipped to handle the sudden drop in income that results from the loss of a large account. The best way to reduce this threat to your business is to build a smarter customer base. Don’t build your company solely on the revenue generated from one or two major clients. Instead, try to find other, smaller clients that can help offset the loss of one of these big accounts.
2) Failing to Manage Cash Flow
If you are concerned with your bottom line, then you should also be watching your cash flow. Managing incoming and outgoing capital is necessary for paying your bills and employees without placing your business in financial risk. Failing to manage your cash flow could cause you to run out of money before you pay all your dues. To mitigate this risk, make sure your cash flow stays positive. Make sure you pay your bills when they’re due and set up terms that ensure timely payment from your customers. Stay in the loop with regular reports; most cash flow issues can be fixed if caught in a timely manner.
3) Getting Hit with Legal Problems
Unfortunately for businesses, lawsuits are a very real threat. In fact, studies have shown that small businesses are disproportionally targeted for legal action. Whether it be from a disgruntled employee or a vengeful customer, lawsuits can put a huge financial strain on your business. Reduce your risk of legal trouble by offering employee training programs that teach them not to engage in actionable offenses. However, even the best training program can’t prevent every lawsuit. The best way to protect your business’s bottom line from legal costs is to invest in commercial liability insurance.
You love your business and you want to see it thrive and grow. Keep your dream alive by watching out for these threats to your business’s bottom line. Remember, if you want to protect your business, it’s time to invest in commercial insurance. To find the right policy for you, trust the experts at Scautub Agency for all your business insurance needs. Contact us to get covered today!