Many small businesses are ideal to run from home. If you rarely need to meet with clients on your own turf—or are just starting out and want to keep your overhead low—running your business out of your house can be a savvy move. And if you work from home, you’re in very good company: More than half (51.6%) of today’s small businesses are home-based, according to the U.S. Census Bureau

 
However, just because you manage your company from your family room doesn’t mean you should approach it too casually. You still need to consider the health and well-being of any employees, subcontractors and clients; safeguard expensive equipment and important data; and maintain a professional image to your clients. 
 
Here are some ways to help protect your home-based business from some common risks:
 
  1. Pick the right product/service. If you’re just starting out, familiarize yourself with common work-at-home business scams. The Federal Trade Commission warns that, in a tight economy, workers are more vulnerable than ever to con artists promising great pay for work you can do from home. Don’t get taken in.
  2. Have an emergency backup plan. Could you continue to seamlessly run your company if your phone system broke down, your air conditioner went out, or a tornado impacted your neighborhood? Things that are annoyances (or more) when you’re a homeowner can become income-killers when you’re trying to run a home business. Clients may switch to other vendors if you’re out of commission for too long, and it can be expensive and stressful to set up phone lines, equipment or a full office elsewhere in an emergency. The American Red Cross and the Federal Emergency Management Agency (FEMA) offer suggestions on how to develop emergency recovery plans for small businesses.  
  3. Make safety a priority. In many cases, your clients don’t necessarily need to know that you work from home. If possible, keep your home address private (a good safety precaution) by using a private mailing address. Many companies now provide you with a private mailbox that is linked to an address that is an actual street address, not just your basic P.O. box. A businesslike address can also project a professional image to clients. 
  4. Safeguard paper and files. Never put client or business information in your home trash or recycling. Instead, shred sensitive documents you no longer need, or go to an offsite business to shred projects that would overwhelm your office shredder. Keep other important documents and physical files in locked cabinets, a fireproof home safe or an offsite safe deposit box. And consider backing up critical electronic files to at least two locations: An external hard drive and a cloud-based storage service, for instance. Also, consider talking to a business insurance agent about data compromise and identity recovery service coverage, which may help in the event that your company suffers a data breach.
  5. Protect yourself from cyber-attacks. Most small proprietors now rely heavily on computers and the Internet to run their businesses. As such, the Federal Communications Commission (FCC) suggests you invest in the latest computer operating systems and security software, and update your web browser regularly, in order to fend off viruses, malware and computer hacking. Use strong passwords for sensitive files and online programs, secure your Wi-Fi network (if you use one), and be cautious about using free Wi-Fi hotspots for business purposes. Similarly, train employees to use technology wisely. And, consider doing background checks on potential workers to minimize liability issues.
  6. Know the limits of homeowners insurance. You might assume that your homeowners insurance covers your home-based business, too. Probably not. For instance, if a supplier trips on your front stairs while delivering business supplies, your homeowners insurance likely won’t cover the incident. In addition, homeowners insurance might not cover you if a natural disaster damages your office equipment. Talk to a business insurance agent to make sure your home-based business is covered for common mishaps.
  7. Include your vehicles. Whether you use a basic car to visit clients or a custom van for delivering catering supplies or flowers, consider how your work would be affected if your business vehicle went into the shop for repairs. Do you have a backup vehicle or would you need to rent one? If you got into an accident with an uninsured driver, could you afford the repair bill? Talk to your insurer about whether your current auto insurance covers all your business auto needs. 
This post comes from the editors of The Allstate Blog, which helps small businesses prepare for the unpredictability in life.
 
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The Allstate Corporation is the largest publicly held personal lines property and casualty insurer in America. Allstate was founded in 1931 and became a publicly traded company in 1993. We are listed on the New York Stock Exchange under the trading symbol ALL. Allstate is widely known through the "You're In Good Hands With Allstate ®" slogan. As of year-end 2012, Allstate had $126.9 billion in total assets. In 2013, Allstate was number 92 on the Fortune 500 list of largest companies in America.

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