Starting a business isn’t for everyone. It entails putting your finances on the line and trusting your intellect and ability to generate revenue. Not everyone can muster the courage to take such a leap of faith. However, if you’re brave enough, hats off to you! But have you considered the potential risks that could jeopardize your business’s financial viability? And do you know how to mitigate those risks? If not, let us guide you through a few strategies to help your business thrive while minimizing the obstacles to unparalleled success.
Maintaining Relationships
Maintaining relationships is one of the fundamental rules in business. As a business owner, leveraging your company through debt may become necessary. This debt can be acquired from well-established banks, individual investors, or even your company’s suppliers.
It is crucial to nurture these relationships to ensure a helping hand during times of financial crisis. Timely repayment of debts is paramount to maintain these relationships and continue doing business together. Failing to meet these obligations can negatively impact your reputation with investors, putting your profile at risk. Stay vigilant and attentive to preserve your standing in the eyes of many investors.
Protection from Money-laundering
Money laundering is a grave offense in the United States, carrying significant repercussions. According to a study, the US accounts for approximately 15 to 38 percent of global money laundering activity. Small and medium-sized enterprises are particularly susceptible to this crime due to their limited knowledge and awareness of money laundering and its prevention.
However, there is no need to fret. AI-powered platforms like WorkFusion, Inc. specialize in providing businesses with comprehensive anti-money laundering compliance programs. You can develop customized solutions according to the requirements of your organization, or you can avail the services of these platforms. AI-powered Digital Workers that are instantly productive and operate 24/7 to enhance BSA/AML and KYC teams and other operational functions.
WorkFusion AI Digital Workers are purpose-built to support banking and financial services organizations. They excel in critical functions such as anti-money laundering (AML), sanctions screening, and Know Your Customer (KYC), enabling your teams and strengthening their capabilities. These workers overcome staffing challenges, enhance compliance, and generate cost savings, making a remarkable impact that revolutionizes your workflow.
Cybersecurity
Protecting small businesses from cybercrime is also particularly challenging because they do not have enough money and resources to spend on cybersecurity. According to Cybersecurity Ventures, the annual cybercrime cost in the US as of 2021 was around $6.9 billion. Cybercriminals target a company’s customer database most of the time to access their financials as well as the company’s cash via acts such as technological manipulation, data diddling, identity theft, etc.
Multiple small steps can help you safeguard your company from these types of hacking techniques. These may be as simple as encrypting your data and software repeatedly, setting up firewalls to help you detect unusual activities on your system immediately, or using anti-virus software programs. It would help if you also considered consulting with white-hat hackers who can tell you which areas of your system are vulnerable and need protection. Furthermore, you also need to be aware of phishing scams that tend to manipulate employees through certain kinds of emails that can be harmful. You need to figure out which emails to open and which to ignore.
Check and Balance
As a business owner, you need to oversee your company’s finances regularly. A good check and balance will help you identify any kinds of discrepancies in the very beginning. This will help you figure out the roots of the discrepancy immediately after its occurrence, and therefore, it will help you fight against it earlier than usual.
It is also highly recommended to use online banking systems to carry out all the regular transactions of your business. This will help you to revise your everyday transactions and financials regularly, thus making regular check and balance a much easier and more convenient task for you. It is also highly recommended to get third-party audits to make sure that there are no discrepancies. This will help your business grow and let your employees know your seriousness about your business financials remaining on track so that they also remain careful.
Diversify your Income
As a business owner, you need to be financially very smart. The first step toward that is knowing that you need to have at least one more source of income apart from your business.
Investing is something that needs a lot of analysis and vigilance. Every penny that you hold has an opportunity cost attached to it. To make sure you make enough use of your money, you should start investing. Once you do so, you need to make sure that you diversify your portfolio. Now, what does that mean? That means you should ensure you do not invest all your money in just one industry. Diversification is important because what if you invest all your money in cement, and it turns out that the cement industry is facing a downfall this year? That makes you lose all your money, right? That is why it is very important to diversify, i.e., invest in different industries like cement, fertilizer, FMCGs, banks, etc. If one industry goes down, the other will increase, so diversify!
Conclusion
Taking these simple steps to protect your business from losses can go a long way to ensure success. These will not only help you to secure your funds but will also help your business grow in numerous ways. It is much easier to find investors for your business if you have a reputation for managing your financials very effectively. This makes more people want to do business with you. These steps are a win-win since they are very cost-effective and beneficial at the same time.
