As a small business owner, you’re likely aware of many of the ups and downs that can befall your business. Some of them are easy to bounce back from, but others will leave you and your employees dealing with a nightmare fit for a horror movie. The good news? Many of them are avoidable, particularly if you implement the right habits and practices. Here are a few that can leave you hiding out in your office, but don’t worry, there are also some tips to help you avoid becoming the next unwitting victim in that potential small business horror flick.
Losing Valuable Information when an Employee Leaves
Some weeks, or even months and years, your business runs smoothly. Employees retention is at an all-time high, and there are no unexpected vacancies to fill. However, every now and then an employee (or several) unexpectedly leave the company, and all too often, they take with them valuable information including passwords, processes, and contact information.
To avoid this, it’s important to commit valuable processes and protocols to paper (digital or hardcopy), allowing those who need to fill the gaps a way to do so minimal roadblocks. Similarly, all too often, especially in a small business, a single employee acts as the only point of contact or gatekeeper for everything from account passwords to business connections and contacts. When it comes to the accounts, agencies, and people that your business relies on, always identify a backup and maintain access information in case an employee is momentarily or permanently unavailable.
Cyber Security Breaches
Speaking of passwords, let’s talk about cybersecurity, particularly the fact that a lack thereof can cost small businesses anywhere between $84,000 and $148,000. Sometimes the error can be as simple as using easy to crack credentials, but often cybersecurity issues can stem beyond personal error. In many cases, particularly in today’s ultra-digital world, software, hardware, and firmware vulnerabilities can emerge overnight, leaving your company vulnerable to numerous types of data theft, including that pertaining to customer/client and financial records.
For that reason, it’s important to practice responsible credential management (advanced passwords, password management, credential take-over protocol for departing employees, etc.) as well as regular technical maintenance like installing the latest version of software or keeping the important hardware in an access-controlled area.
Cash Flow Problems
For many businesses, a cash flow problem is inevitable. Poor performance during a given period of time, seasonal lulls, numerous late invoices, etc. can all leave you, or your account team, struck with the fear that only a plummeting bottom line can evoke.
You can’t always plan for this nightmare, but you can do your best to avoid it by regularly reflecting on the past, forecasting for the future, and taking note of potential roadblocks. The holidays are often a time when this nightmare rears its ugly head, largely because there are so many financial obligations. Inventory, marketing, and staffing responsibilities can take a huge chunk of out your cash flow, and sometimes it can take several weeks to move past that. Take note of challenging times and make it point to take early action to prevent them. If that means planning and budgeting for Q4 as early as Q1, then so be it.
A Low Credit Score
Like the old adage would suggest, when it comes to credit, “you don’t know what you got till it’s gone.” If you’re in the middle of a cash flow problem and you need to obtain money to keep your business running, it’s likely that a lending agreement will be one of the most logical options. But, if you have a poor credit score, it will also be one that is either entirely out of reach or extraordinarily expensive.
Get your business credit card score and report, and if it’s not looking too hot, implement a plan to take it to the next level. Sometimes that means catching up on unpaid bills and establishing a history of on-time payments. Other times its making changes to your credit utilization patterns. If you have a poor score, then take the time to figure out why it’s low and how you can bring it up. You can track your credit score and keep an eye on your business credit report with Nav.
Employment Violations
In 2017, the United States Equal Employment Opportunity (EEOC) received 84,254 reports of workplace discrimination, with the top five being related to retaliation, race, gender, disability, and age. At best, these types of accusation can be indicative of a caustic work environment that can erode your business over time. At worst, these reports, if not addressed, can lead to significant legal issues for the business, many of which can potentially close your doors for good.
Many businesses find that the role of a dedicated HR manager or department can and often does mitigate these risks, but regardless of how extensive your HR department is (or is not), it’s vital that you understand all rules and regulations set forth by EEOC; this includes the Title VII of the Civil Rights Act (Title VII), the Equal Pay Act (EPA), the Americans with Disabilities Act (ADA), and the Age Discrimination in Employment Act (ADEA). It’s also important to have a firm established handbook that outlines these rules as well as employee conduct expectations.
The life of an entrepreneur is frequently one lead by big dreams and a lot of motivation. Don’t let poor judgment or an oversight turn those dreams into costly nightmares. Many of them can be avoided by establishing and following thorough and concise protocols and process that govern everything from employee departures to the employer/employee relationship.
This article was originally written on October 16, 2018.
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