As a small-business owner, you’ve already taken a few gambles with your financing. You’ve had to make some risky investments to cover the costs of equipment, and you took a chance when you hired those students fresh out of college. So far, your risks have paid off. But what can you do to ensure the next few steps in your start-up company lead to success?
1. Closely Monitor Your Cash Flow
While your products seem to sell well now, you have no guarantee that those numbers will remain the same. If the market crashes a few months in the future, do you have an emergency plan in place? If you don’t already, pay extra attention to your cash flow.
Evaluate how much money you have available, as well as how long that amount will last during an emergency. Anticipate which expenses you would cut and why. Additionally, you’ll want to closely monitor your payroll. Accidentally overpaying employees will eat away at your profits, while underpaying employees will lead to a disgruntled team and costly corrections.
To minimize errors, switch to an automated payroll system that takes care of the calculations for you. Using a site that allows you to create a paycheck stub can help you to avoid mistakes.
2. Don’t Skimp on Insurance
You already know that the law requires you to provide insurance for your employees if they work full time. And you also know that you need insurance to protect your general assets. However, basic policies don’t always cover the risks your specific industry faces.
For example, if half of your sales come through your online store, you may have property insurance that protects your inventory as well as business-interruption insurance should a natural disaster destroy your goods. But if your web host were to crash, resulting in a loss of online customers for several weeks, your current policies might not cover the lost income since nothing damaged the actual inventory.
As your business expands, you’ll want to research more specific policies that apply to your business, including errors and omissions, crime coverage, employed lawyers coverage, and merger and acquisitions. If you don’t know which policy best applies to your company, talk to a professional.
3. Keep Public Disclosure to a Minimum
Websites such as Kickstarter and GoFundMe seem like a great way to acquire new investors and raise money for your latest invention or product. You simply describe your new design, show it to online viewers, and wait for the cash to come rolling in.
However, be careful with how much you reveal online. While a few details generate excitement, too many facts and figures may give your competitors a chance to replicate your product. And putting the information on the internet affects your international patent rights, harming your chances of selling your newest brainchild elsewhere. If you still need funding through these public sites, hire a lawyer to help you set up legal protection.
When you follow these steps, you can minimize risks while building a firmer foundation for your company.