If you work in a small business, or at home, you may think emergency plans are just for big business. Actually, the small size of your business may make you more vulnerable since you have fewer resources. This article suggests which risks you should consider, and some sensible precautions.
What are the risks to your business?
As a sole trader or small company, there are a number of risks to which you are exposed which could have a serious impact on your ability to earn a livelihood. The risks may be characterized as one of three types: personal, resources, market.
Personal risks are those which could stop you being able to work. These are usually health related. Sole trader or small companies are much more dependent upon the ability of the individual to be fit for work than larger entities which may be able to compensate for individual absence though the efforts of others.
Resource risks are those that relate to your assets. Increasingly, assets are knowledge-based. These are either your personal knowledge, in which case the relevant risks are the personal risks, or information-based, in which case it is the threats to your information systems, usually based around the use of technology.
The market risks are the risks that the business environment will change reducing the value of what you offer due to technological or political change.
What are the sensible precautions to take?
The pragmatic precautions to take in response to these categories of risk will vary according to category.
Personal risks are best addressed through insurance: a whole range of insurance products are available, some to cover basic health care costs in those contexts where such is not publicly available. Even in those countries where basic health care is provided by the state, there may be a need to insure one’s income against critical illness or disability.
Resource risks may be managed through the technology itself. Processes such as backup strategies and password policies are money-cheap, time expensive responses to risks that relate to your assets. You can also delete sensitive information from laptops and mobile PCs. Other simple precautions aimed at preventing harm to resources include physical devices such as security and fire alarm systems. The one exception is personal knowledge, which should be protected by insurance as a personal risk.
Finally, market risks are some of the most difficult to manage. In general, a sensible response is to invest a proportion of your income in ensuring that you keep your knowledge and skills up-to-date.
Conclusion
As a home worker or small company, you are almost uniquely vulnerable to a number of risks. A range of simple precautions could save your livelihood if things go wrong.
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