For small business owners, it is not the case, sadly, that the only thing we need to fear is fear itself. On the contrary, we must remain vigilant that we don't miss the one vulnerability, or the several, that could spell doom for our companies.
Gorilla customers: Do one or two customers provide too high a percentage of your revenues? Would you suffer a great deal if those customers left? Make sure you market aggressively to balance out your base. Gorillas walk away. Believe it. (See an earlier Succeeding post on this topic).
Embezzlement and theft: How many stories have you heard about the employer who realized, too late, that accounts had been bled dry, often by a trusted employee with too much access? Employ financial safeguards.
Overdependence on any one employee: Dan S. Kennedy, in his book No B.S. Ruthless Management of People and Profits, reminds readers that "one is the loneliest number." In other words, if you have one employee holding unduplicated skills or knowledge, you are vulnerable if that person leaves. Either cross-train someone, have a second person in the department (if you can afford it) or, at least, have a few job candidates or contractors on your short list for that fateful day.
Potentially litigious employees: Maybe you didn't do anything wrong. Or maybe one of your staff members said something inappropriate to another. Perhaps you fired for cause and the former employee said it was because of age or race. Who knows. Whatever the reason, and whether or not you triumph in the end, fighting a legal battle over employment issues is expensive and distracting. For less than you may think, you can purchase Employment Practices Liability Insurance (EPLI) and, largely, leave the litigating to the insurers.
Empty piggy bank: Does your business have two to three months cash available, whether in the bank or as a line of credit? If not, the specter of customer loss, general business downturn or a slowing of customer payments is scary. Start building a fund, or find cash alternatives to which you could turn.
Falling behind on taxes and obligations: It's a sad day when a company makes the news because it hasn't met its obligations, whether for payroll taxes, employee retirement account funding, sales tax payments, or similar commitments. If you fear you may fall behind, talk with your accountant immediately and get help. Failing to pay important obligations is a losing game.
Neglecting your reputation: It's one of your most important assets. We've blogged about this before. Build and protect your small business' reputation.
Your business may have its own unique vulnerabilities. What are they? And how will you repair them before they negatively impact all your hard work?
This article was originally published in Succeeding in Small Business.
