Tuesday, December 8, 2015

Six Tips To Protect Your Business Financially

Every day, businesses close their doors. Most often, this is simply due to being overwhelmed with expenses that far exceed revenues. 

If you want to survive as a business owner, you are going to need to take the proper steps to protect your business financially.

1. Purchase Business Insurance


One thing you certainly don’t want to cut corners on is business insurance. Insurance coverage may seem like an overhead expense you can easily avoid. 

However, if something goes wrong and you don’t have insurance, your company can be put out of business instantly. Insure your facilities and assets and obtain proper liability coverage.

2. Obtain Proper Legal Representation


Protecting your company from financial ruin requires making sure the legal aspects of running your business are properly addressed. The best way to do this is by hiring a law firm with expertise in business law, such as Carter West

Different situations where expert legal services will be needed include completing a merger, purchasing real estate, implementing venture capital financing, protecting intellectual property and more.

3. Separate Your Personal and Business Assets


As a business owner, one thing you should certainly do is make sure your personal assets and the business’s assets are not mixed together. If the expenses are hard to tell apart, you will have a harder time obtaining deductions on your taxes. 

You should have separate bank accounts and credit cards for yourself and the business. This will also protect you if your company fails or your identity is stolen.

4. Secure Your IT


You also need to make sure your company is secure from a digital stand point as well. Not having proper firewalls and security software installed on company computers could lead to hackers stealing your information and customer data. 

You should also use a service to back up your information. You don’t want to lose it due to something like a power surge during a thunder storm.

5. Diversify Business Investments


Like any portfolio, your business investments should be properly diversified. This is especially the case if you’re starting a new business that is in a risky industry. 

One way you can diversify your business investments is by choosing different kinds of asset classes such as stocks, bonds, commodities real estate and more.

6. Pay Your Taxes Correctly


You need to make sure your business is following the law in regards to your accounting procedures and how you pay your business income taxes to the government. Consult with experts instead of trying to go it alone. The consequences for making mistakes can be severe.



Overall, protecting your business means always staying on top of your finances. While it’s good to ask for help when you need it, don’t trust the financial livelihood of your company to someone below you. 

You have to stay on top of each financial aspect of your company as a responsible business owner.

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