In business, there’s a time to go on the offensive and a time to play defense. Both tactics serve essential roles in protecting your business and maximizing your potential.
Unfortunately, many company owners and managers spend so much time concentrating on offense that they may fail to notice the role defensive strategies can play in keeping their operations safe and stable.
If you want to do what’s best for your firm, you mustn’t commit the same mistakes that other business owners too often make. It’s crucial to prioritize defensive measures and protect your company.
Six Ways to Protect Your Business
Protection comes in all shapes, forms, sizes, and applications. When you look for ways to safeguard your firm against internal and external threats, here are six specific strategies you could pursue.
• Hire an Attorney
Though you don’t necessarily need one in house, it’s smart to have a business attorney ready in the wings to help you pursue litigation, defend against a lawsuit, answer thorny questions, and deal with other legal and financial processes. Of course you hope that you’ll rarely need the services of your attorney, but having a qualified professional on the team provides peace of mind against unforeseeable threats.
• Create a Legal Structure
When you’re launching a business, you need to think about what type of entity you want to run. The most common types include the sole proprietorship, partnership, corporation, S corporation, and limited liability company (LLC).
The type of legal structure you decide to set up will have an impact on the amount of taxes your business owes, the taxes you will personally owe, your personal liability, and the way in which your business will be treated in a court of law.
With the right structure, you can protect yourself and your business more effectively from unnecessary levels of risk.
• Protect Your Assets
Though it can take time and legwork, protecting your physical and digital assets with legal shields like trademarks and patents will go a long way toward fending off threats from unscrupulous companies and entrepreneurs.
• Invest in Insurance
Business insurance is something you need to think about, as well. It can seem like a waste of money, but the protection and peace of mind that insurance will provide is invaluable while you concentrate on more immediate matters.
There are dozens of different policies to choose from. At the very least, you should weigh the virtues of liability insurance, errors and omissions coverage, property insurance, and workers’ compensation insurance.
• Develop Comprehensive Contracts
“In addition to purchasing insurance, another way to insure yourself against liability is to build protection into your contracts,” entrepreneur Brian Beers writes.
“If an act of nature, a specific supplier or some other uncontrollable act can make it impossible for you to fulfill a contract (and thus open yourself up to legal action), then you should be putting to ink that you are not liable for incomplete work due to these factors.”
The more specific you can get in your contracts, the greater protection your company will enjoy. If a prospective customer, supplier, or partner balks at any of the clauses or contingencies you propose, you may want to cut your losses and move on to someone else.
• Develop a Cyber Security Strategy
In the current age of cyber hostility, you probably can’t afford to go without a solid digital security strategy. Tools such as encryption, anti-virus software, and cloud security mechanisms are a must. “You should also make sure to follow password best practices,” Square advises.
“That means changing your passwords frequently — things like door codes and logins to any online service your business uses, including email. It also means making sure your passwords are rock solid. A strong password has at least eight characters, upper and lowercase letters, numbers, and symbols.”
Create Space to Thrive
Treat these defensive measures like you’re building a wall around a piece of real estate. By building a strong, well-fortified wall, you’re creating a safe space in which to do other things.
In terms of business, you’ll be giving yourself the freedom to create, innovate, and sell. And though some cracks and holes in your defense will likely be unavoidable, a proactive approach is always better than a reactive one. Now’s the time to get started!
