Nearly two-thirds of businesses fail to last beyond ten years.
There are a variety of reasons why businesses fail. That’s because as a business you face multiple types of business risk.
Any of one those business risks could be the cause of the downfall of your business, so it’s important to know what the most common risks are.
Read on as we take a look at three types of business risk all companies face.
- Economic Risk
When the global financial crash hit in 2007, it had a huge impact on businesses around the world.
That’s because the state of the local, national, and global economy can have a huge impact on your business. This is something totally beyond your control, so it’s always a risk you face.
When the economy suffers, it can hit your business in a number of ways. Businesses you rely on may collapse, the cost of financing may change, lenders may become more cautious.
The best way to protect yourself against economic risk is to build up cash reserves so that you have something to fall back on if the worst happens.
- Security Risk
Technology has huge benefits for many businesses, but it also comes with its own risks.
Many businesses rely on data for the smooth running of their businesses, but any data that you store is at risk from cybercrime. A data breach can have huge consequences for your business. Many small businesses that have data breaches go out of business before very long.
Identity theft and payment fraud are other security risks that you can face as a business. In order to protect yourself, you need to ensure you have robust cybersecurity measures in place.
- Reputational Risk
Your business is only ever as strong as your reputation.
Once your reputation takes a hit, it can be hard for you to ever rebuild it. If you don’t turn things around, your business may go under before you know it.
Social media has made it even easier for people to attack the reputation of your business through poor reviews, or negative social media posts. It’s vital that you protect yourself against damage to your reputation by having clear reputation management strategies in place.
Another way to protect yourself against business risks is to take out insurance that can protect you should the worst happen. Agencies such as Gessel & Associates Insurance Agency can offer you a range of cover such as business insurance, cyber liability insurance, and more.
Protect Yourself Against Common Types of Business Risk
Whilst all businesses face multiple types of business risk, the good news is that you can protect yourself against them.
Whether it’s through insurance, cybersecurity, or other means, it’s possible to minimize the risks that your business faces. Whilst it’s never possible to completely eliminate risk, there are plenty of things you can do to protect your business.
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