3rd Guiding Principle
Yet there are many ways you could lose those things of value to you.
In fact, when you decide to be in business you are deciding to take some risk. You may need to put some assets on the line – for instance, your family savings or your home. So, no pressure!
How will you plan for, and control, your risks? What business structure will you choose, or have you chosen? Do you understand the differences? Should you move to a better situation?
Many businesses operate with more than one owner. What are your arrangements with any partners you may have? Have you put legal agreements in place, or are you open to expensive litigation?
Have you considered the various legal structures that may be suitable for you? Family and operating trusts are options to help keep your assets separated from your risk.
An obvious solution for protection is insurance. But have you looked at what you are (or what you are not) insuring?
Most people would think it was crazy to drive a car on the road without insurance – but so many people do it. The risks of financial loss are simply huge!
Yet how many of us have considered the huge losses that could occur in our business? What would happen – if you can’t work, or if a client is hurt on your premises, or your product goes sour?
What about you landlords out there? Is the fabric of the house covered correctly? Are you safe from claims by your tenants?
On a more day-to-day basis, how about your cash flow? How are you assessing new clients and the likelihood of them paying you, or good clients who might suddenly turn bad?
Is there a case for using factoring agencies and collection companies to ensure you’re as much of a dominant position as you can be?
Consider the wider meaning of assets – the intellectual property in your business, your trademark or patents (or lack of them), your staff and, not least, yourself and your health.