This is the eighth article in a series about powering your small business through 12 areas of internal management.
Eleanor Roosevelt once advised, “Do one thing every day that scares you.” We need reminders like this because it’s so easy to run life on autopilot. Living life in the middle of our comfort zone keeps many scary things at bay—but it also leads to stagnation. Taking risks in life is essential for growth.
The same is true for entrepreneurs and creatives. When you fearlessly choose to make a life by pursuing your dreams, risk is right there with you! Growing your business will require getting comfortable with a certain amount of risk.
But some types of risk are scarier than others to tackle. (And some you’d be wiser to avoid!) How do you know the sort of risk that’s reasonable to carry, you ask? Management of risk is 1 of the 12 areas of internal management that small business owners need to incorporate in overall financial strategy.
Risk can’t be eliminated entirely. But it can be mitigated and minimized. Proper strategic management of risk will help your small business live on the edge of your comfort zone. This is where you will be stretched and where you will grow—when the conditions are right! Two things produce the right environment for taking reasonable business risks:
Each year you should look at your insurance coverage to make sure you have all your bases covered. Business liability insurance protects your business from claims of bodily injury or property damage. Workers comp insurance protects your business and employees from financial loss if an employee gets hurt on the job or sick from a work-related cause. These are just two common types of insurance that will help you operate day to day, despite the very real risks associated with running your own business. Like everything else, business needs change. Reviewing your coverage each year will help you pay for the insurance you need for the current risk load.
Another way to minimize your business risk is to have a great attorney. You want someone who knows how the law applies to your business. An attorney who helps you embrace wise forms of risk is invaluable! A great attorney will help you develop and review contracts, advise on sticky business situations, and mitigate your legal exposure. Legal counsel isn’t cheap, of course, but it’s an investment that allows you to operate at the edge of your comfort zone, right where your business will grow and thrive.
Strategic risk management will help you fearlessly pursue your business dreams. Like the other areas of internal management, this one works best with regular review. Think of your insurance agent and attorney as key members of your risk management team! They are the experts who will help you take reasonable risk that leads to growth.
Are you ready to bring this area of internal management into line with your financial management goals? Officeheads is ready to help! We give entrepreneurs and creatives the financial tools, processes, and team needed to move their business ahead of the competition and onto solid financial footing. Reach out today to learn how we can get started.