tarting a business is only half the battle. Keeping an organization protected is an ongoing issue that every owner has to deal with. Asset protection may seem complicated, but it really all comes down to several fundamentals that every business owner should be aware of. Here are six key concepts that you should consider applying when planning your strategy for keeping corporate assets safe.
1. Modernize Your Infrastructure
Starting a business requires a bewildering array of material goods. The quality of that infrastructure sets the tone for everything that comes next, including asset security. Small oversights can cause great loss, from old, uninsulated wiring presenting a fire hazard to obsolete computers presenting an easy target for malware attacks. Even something as simple as a power surge can cause costly data loss when a system shuts down unexpectedly, so install hardware like surge protection equipment before an expensive accident has the chance to happen.
2. Choose the Correct Business Entity
This step should actually be taken before all others. The organizational structure of a business determines in large part both the legal liabilities of owners or managers and the tax status that you’ll be operating under. The most common forms are a partnership, sole proprietorship, corporation and S corporation. Filing as a limited liability company (LLC) is also a common and very versatile structure, but it’s allowed via state statute, so regulations and benefits may vary considerably. Base your choices on careful research and examination of what the long-term goals of your business are.
3. Have the Right Insurance
This can get tricky. Insurance is vital to protecting yourself and your business, but there’s no one “perfect fit” since no two companies are the same. A business owner’s policy (BOP) is a good place to start since it combines general liability, business income and commercial property insurance, but consider going beyond this to protect assets against incidents such as bodily injury claims. A commercial umbrella policy could be a good idea since these extend the limits of primary liability coverage, but this isn’t true in all cases (such as fraudulent, criminal or reckless acts), so exercise caution when choosing a policy.
4. Keep Contracts and Paperwork Aboveboard
Your business itself may be on the level, but that won’t make a difference if the people you work with aren’t. Only deal with licensed and bonded professionals. Never hire under-the-table workers. Make sure that you have solid contracts in place for every project if you subcontract. The most important thing is to do your research on any company you have dealings with. The Better Business Bureau website gives a wealth of data such as complaints filed against the company in question, so avail yourself of any free learning resources that you can.
5. Protect Sensitive Data
Data breaches are incredibly costly for businesses, not just in terms of lost revenue, but in lost reputation as well. If customers don’t feel as if their personal information is in safe hands with your company, they’ll go elsewhere. Be certain that you have upgraded antivirus and firewall systems installed on all of your devices.
Make sure to backup your data as well, in the cloud if nowhere else, but ideally on physically secured flash drives and hard copy files. If your workers are mostly remote or otherwise decentralized, develop a comprehensive endpoint security system that standardizes protocols and leaves no exploitable gaps in your digital defense.
6. Prioritize Employee Training
In the current economy, businesses are scrambling to find a workforce. That’s no excuse to cut corners when it comes to the quality of your employees. In 2019, Verizon’s Data Breach Investigation Report found that 34% of data breach incidents were caused by what they called “insider threat actors.” It’s not just malice that causes employees to fail at protecting their company’s interests; sometimes it’s simple ignorance. Seasoned veterans aren’t born, they’re made through rigorous and regular training programs that emphasize situational awareness and professionalism.
These steps are only the basics. There are many important steps that entrepreneurs should take into account when starting their operations. Take your time and research the best solutions for your unique company.