Risk Management: How can you protect your small business
Whatever business you run, there are a number of risks you’ll face (such as fraud, theft, and asset misuse) that could challenge your business’s long-term viability. In order to reduce risk factors, it’s important to plan how to build your best defences.
A key way to mitigate against risk is to invest in highly-skilled small business accountants who’ll help you defend against the risk factors outlined below.
What are the main risks small businesses face?
In order to defend against risks, it’s important to understand what the main dangers you might face are. Below, we outline 4 major risk areas:
- Strategic Risk- Relates to the risk of situation changes in relation to your company’s strategy which may have a negative impact on your goals. A decent small business accountant in London will be able to help you to design a comprehensive and well-thought-out business plan that will help you combat against this.
- Compliance Risk – Relates to the risk of not complying with all of the necessary laws and regulations which apply to your business, both now and in the future. For example, as your business grows you may be subject to new rules that hadn’t previously applied, adding unexpected costs to maintain regulatory compliance. Looking into what good business accountants in London can offer and finding an accountant with most suitable compliance expertise will ensure the safety of your business.
- Financial Risk – Refers to the potential for a sudden financial loss in terms of money flowing into and out of your business. This could include having a huge proportion of your revenue linked to a single client, having too much debt for your business size, or expanding internationally. Good Cashflow specialists or an expert growth Accountant in London should be able to help you mitigate these risks. This important step is sure to help you sleep at night peacefully.
- Operational Risk – Preventing against external risks is one thing, but you also need to stay alert for potential in-house sources of risk, such as failures in your day-to-day operations, technical failures, or staffing issues. Although this type of risk might seem small-fry in comparison to operational risk, it’s still worth finding the best small business accountants London offers, to help you put measures in place to mitigate these risks – such as making sure you have insurance and a healthy cash-flow.
- Reputational Risk – No matter how big or small your business is, business reputation is vital to your ongoing success. Reputational damage can lead to loss of revenue, loss of business partners, and staffing issues. The best small business accountants London provides will have a breadth of experience in assisting businesses with maintaining their reputation and will help you to think of strategies to help mitigate against these risks.
With innumerable risks your business can face, it’s vital to invest in the best small business accountants London has to offer, who have the necessary expertise to guide you through this perilous maze.
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