5 Ways to Protect Your Small Business in 2020

Listen in! Pick up some expert advice to a reader's question that we selected from CyberSchmooz.

This past year has been tough for both individuals and businesses. Small businesses, in particular, took a hit in many different areas. To protect your small business in 2020 and future years, there are a few different tips that you could consider implementing.

Avoid Cyber Attacks

For a small or even a large business, cyberattacks can be detrimental. Cyber attacks can result in a huge financial loss, harm your computer equipment, and cause a breach of confidential customer data. When people learn about what happened, your business will likely lose customer trust and loyalty. You can work to prevent cyberattacks by implementing the following:

Create secure passwords – do not use the same password for all your files. Change them regularly
Update and maintain antivirus software
Use a firewall to prevent malware from getting through
Keep offline copies of important data
Train employees on computer security
Limit access to important documents

Implementing these methods will reduce the chance that your business will fall victim to a cyber attack.

Perform Background Checks

While recruiting for open positions, you should consider investing in background search services to aid you. Recruitment is a time-consuming process, and you do not want to have to keep doing it over and over for the same position if an employee does not work out. As well, you will want to ensure that the candidate will benefit your organization. Conducting a background search is a good method of verifying that the candidate is who they say they are, which will keep your organization and employees safer.

For example, using a service such as CheckPeople.com will provide you with records of the candidate’s history. You can look through the data and match it up to the resume or the things that the candidate was saying during the interview. Taking the extra step to ensure the safety of your business is always a good idea!

Incorporate Your Business

If you are self-employed, or a sole proprietor, you should think about incorporation for your small business. As a sole proprietor, it is easy for your personal assets such as your house or car to get mixed up in the business. If this happens, your assets may get sold to pay off debts from the business, which is not a scenario that you want to see. It may be a tedious process of filling out paperwork in the beginning, but it is more beneficial for you in the long run to have a business that is a completely separate entity. It also allows you the opportunity to apply for tax benefits such as the small business deduction. Consult a professional if you have an interest in taking the next step to incorporate your business.

Work with a Financial Advisor

If you are struggling with business debt, it may be worth your while to speak with a financial advisor. They will be able to point you in the right direction to pay off the debt as quickly as possible without disrupting your everyday business operations. They may look over your reoccurring expenses and make suggestions on where to cut back on. Getting rid of debt should be a priority, so you do not need to worry about interest expense or falling behind on payments.

You should also aim to have a nest egg saved up in case some unforeseen circumstance was to happen. For example, many businesses were not prepared for a disaster such as the pandemic and suffered financially. Other businesses had a little extra saved and were able to scrape by after making some modifications to their operations.

Improve Cashflow

This may be easier said than done, but employers should always be thinking of new ways to improve their cash flow. If you have a little surplus revenue, save it, or put it into low-risk investments. You can inject the interest from these investments right back into your business. If liquidity is an issue, make sure you can withdraw these investments fairly quickly with no financial penalty.

There are many different ways to improve cash flow on a general level. First, you can examine the product or service that you provide and expand on it. If you run a mechanical shop, try offering car detailing as well. Clients will like this because of the convivence. If their car is in the shop all day anyway for repairs, it may as well get cleaned at the same time.

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