Top 5 Ways to Reduce the Risks of a Home-Based Business
As a home-based business entrepreneur, you have to be able to anticipate and understand some of the risks that come along with running a home-based business.
The mother of all risks when it comes to business entrepreneurship is failure.
Nevertheless, this shouldn’t discourage you. With us are some of the ways to reduce the risks of a home-based business to help your project grow.
Business entrepreneurship and risks are like two pieces of a pair of socks, they go hand-in-hand. As a home-based business entrepreneur, it is therefore important that you be able to anticipate and understand some of the risks that come along with running a home-based business.
What could possibly go wrong?
This task is not as easy as it might seem. Once you anticipate some of the risks the future holds for your home-based business, you can now adequately plan for them.
What Could Possibly Go Wrong?
Besides the rewards, home-based businesses come with their fair share of risks. Let’s take a quick look at some of the unfortunate events that your home-based business could encounter;
- Damage of business property. Natural disasters to your home as well pose a threat to your home-based business by damaging your business property.
- Project interruptions. Just as your family can be forced to sleep outside due to a home fire, so can a home-based business. You might end up suspending some of the major operations for some time until you contain the situation.
- Injury and sickness. Sound health is crucial towards business productivity and this cannot be taken for granted. This can be a major home business risks for solopreneurs.
- Lawsuits. You are served with a lawsuit form your customers at any time. Imagine your customer suing you just because your floor is too slippery and they ended up tripping or maybe just a minor breach of contract. Picture the effect this would have on your business without failing to consider some of the potential liability risks of running a home business.
Ways to Reduce Home-Based Business Risks
What could possibly go wrong that could warrant your home-based business to a lawsuit?
Home-based businesses are at risk of lawsuits for customer accidents and several other unprecedented day-to-day business undertakings.
It is therefore important that business owners assess the risks and benefits of home business and some of the potential liability risks that come along with running a home-based business and ways to contain them. Meticulously designed business practices can help mitigate some of these home business risks. Come up with effective liability policies, both professional and product that can offer immunity to some of the financial business risks secondary to third-party insurance claims.
Personal insurance policies don’t cover your home-based business. It’s advisable to have a coverage insurance policy effective for both.
2. Injury and Sickness
One of the challenges of running a home-based business is an injury at the workplace. This negatively affects productivity and even go ahead to inflate insurance premiums that pose major business insurance risks. As a business owner, you need to enlighten your employees on workplace safety and have a proper employee’s compensation plan.
This plan is an insurance that will provide wage compensation and a medical cover to workers injured at the workplace. This can as well provide immunity from lawsuits related to workplace accidents. It is a state requirement for employees to have proper health and accidental insurance coverage. Disability coverage for your workers has proven effective in most instances.
3. Security Breach
In the current tech world, most businesses have ended up collapsing due to data breaches and information loss. If you want to build a healthy business, ensure that you don’t skimp any security measures. Ensure you’ve followed the steps involved in data security. This can be through activating firewalls, having unique passwords protection and complex security protocols for data access. Consider data breach insurance could come in handy. For some reason, some businesses fail to recover from data loss or data storage devices damage – investing in data recovery help combat this. Insurance policies could as well help.
4. Identify and Secure Your Customers
Your first target as a home-based business owner is to identify and secure your customer base. Once you lose your customers, your home-based business is doomed;
Focusing on Single Products
For some reason, it’s quite tempting to swing for the fences and try being all things to all people. In order to boost your business, it’s often advisable, less risky and much profitable to focus on single products that you can market, sell and do all that is within your reach for your home-based business product to acquire the best sales. Troy, a home-based business owner got tired of collecting dog poop from his customer’s backyard.
Instead of spending money on disposable bins and advertising waste disposal to his customer’s, Troy decided to decorate his Ford pick-up with advertisements of his major products drive it during his daily errand of collecting dog poop. Killing two birds with one stone, you’d say! Through this advertisement act, Troy managed to turn what was once a nightmare into a booming home-based business. This has saved him quite a fortune that he would have instead spent on marketing his products and business.
Identify Ways of Increasing Sales to Your Current Customers
It can be a cheaper and good customer protection option to improve your home-based business revenues by selling more of your existing products to your existing customers. A good way to realize this can be through volume discounts. Selling two apples for the price of one gives you a chance to gather additional sales without sacrificing much profit. This is a major technique with most home business that reduces the risk of losing customers.
5. Property Loss
Property loss is one of the common type of business risks. Besides, anything could go wrong. Come up with a detailed list of all your business assets without forgetting the inventor. These records can help file a claim in case of property loss. A quick tip is to store the important documents in a fireproof box and keep off basement document storage.
There is a lot of potential in running a home-based business. There’s the saving money that would’ve been spent on office space, doing away with commute time, you name it. However, there are home-based business risks involved, and for an ambitious home-based business entrepreneur, you need to anticipate and understand these risks. Be sure to apply some of the tips you’ve gathered from our article and your business will be unstoppable.
Are you a home-based business owner?
What are some of the home depot business risks you’ve encountered? We’d like to know.