Ask SCORE: Be aware of and prevent common risks
Published 8:40 pm Tuesday, November 15, 2022
Ask SCORE by Dean Swanson
In my last column, I started a series of three columns devoted to the topic of protecting the investment that you have in your business. You have a lot of time and financial investment in your business. Unfortunately, my experience with CEOs is that many have not spent much time in planning to protect it. In this second discussion, I will provide some suggestions on being aware of common risks and how to prevent them.
Fire, injuries, theft and cyber security are some of the most common risks your business should be prepared to handle.
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Preventing fires. Many businesses find it helpful to appoint someone to be the person in charge of fire safety and prevention. This person is responsible for reading up on and ensuring your business is up to date on all municipal fire codes.
Most of those codes will probably include best practices you know already. For example:
• Have a regular routine to take out the trash daily.
• If you’re going to allow smoking outside, create a designated space with smoking receptacles.
• Put your fire extinguisher in a visible place.
• Invest in a fire alarm system.
• Conduct routine fire drills and train employees on the appropriate evacuation routes.
In general, fire extinguishers should be inspected once a year, and smoke detectors once every 10 years. Check smoke detector batteries regularly.
Avoiding injuries. Making safety a priority at your business is key to avoiding injuries that can result in costly lawsuits. Here are a few things you can do to keep your employees and your customers safe:
• Maintain and inspect all equipment regularly.
• Keep things like goggles, gloves and first-aid kits on hand.
• Post signs with safety reminders for employees.
• Make sure you run criminal background checks on employees, and, if relevant, ensure employees have safe driving records.
Also, remember to seek expert help. OSHA can help small businesses by supplying compliance guides for their rules and respond to small business owners who have questions about compliance. The agency has regional offices throughout the U.S. and includes small businesses in their process for creating rules and regulations.
Preventing theft. The threat of theft can come from criminals, customers and your employees, which is why it’s vital to take the proper precautions to protect your business from commercial theft.
From a property standpoint, some of the same practices you’d use to secure your home applies to your business. For example:
• Lock your doors when you leave and make sure they’re secure.
• Make sure your business is well lit, both inside and outside.
• When shopping for an alarm system, consider one with motion detection that will automatically alert police.
• Install fencing, if needed.
For employees, conduct pre-employment background checks and make sure controls are in place to track inventory and cashflow. Install video cameras at all entrances and exits, along with any sensitive areas, like the cash register. Limit access to sensitive areas, such as the safe room, to only employees who need it.
Further, keep a second set of records for all critical operations, such as accounts receivable, inventory and insurance plans. It’s a good idea to keep those records in a different location from your primary place of business.
Cyber security and data loss prevention. While major cyber attacks in the news might make it seem like they only happen to large corporations, no business is immune to data security breaches. When you keep customer information on hand, a breach can severely hamper your operations and strain relationships with customers, not to mention potentially leave you liable for a lawsuit.
Fortunately, having a solid plan in place to guard against cyber threats, combined with the right software and a cyber insurance policy, can provide protection and give you peace of mind.
Formulate and automate a backup plan in the form of people and practices, as well as software. If a system you’re using shuts down, is there an alternative way for employees and customers to gain access to systems necessary to doing business?
If you’re a one- or two-person operation, is there someone else trained to do basic business operating tasks?
When it comes to software and data protection, back up your work in more than one place, even work saved remotely on an external hard drive or in the cloud.
Secure your passwords, and if possible, consider using a Virtual Private Network (VPN) for internet access.
Train and teach your employees the importance of practicing good online habits and cyber security. This can include frequently changing passwords and being aware of phishing emails.
A good software program can also help you ensure that your network hardware, critical data, documents and other information are safe from cyber theft or damage. When choosing software, consider whether it can:
• Identify data that could be compromised or vulnerable, like customer credit card numbers or addresses.
• Detect and prevent data intrusion and hacking.
• Generate audits and reports of the health and current state of your systems.