Business owners are generally risk-takers by nature, but while they may make calculated risks, they might overlook unexpected ways they subject themselves to certain risks. Risky behavior is common in the operation of a business and can be rewarding, but business owners should also do well to protect themselves from particular risks.
Potential risks can destroy a business, whether small and mid-sized, or cause serious and costly damage and even take considerable time to repair. Let’s look at 4 unexpected ways business owners might subject themselves to risk.
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1. Spreading Themselves Far Too Thin
It is important to win the game of strategy when operating a business, but often times many business owners spread themselves too thin. Pursuing multiple business ventures and trying to do everything on their own are common ways business owners spread themselves thin. Those who pursue several business ventures at the same time are more like to be unable to give the time and energy required to thrive and become successful.
Business owners are not short of ideas, but a risk management team would be the first to advise that the original business should be the focus if success is the desired outcome. Furthermore, while delegation may be difficult and some business owners believe that to do the job right is to do it themselves, this insistence can cause a significant overload of tasks and stress. This leaves them vulnerable to risks because of a lack of efficiency, which is needed for business success.
2. Putting Too Many Eggs in One Basket
A smart risk management team would advise against putting too many of your business eggs in one basket. Take a business owner who relies on a few big clients for most of their annual revenue, suddenly losing those clients for one reason or another.
What would that mean for a business and a business owner? Religiously rely on a few particular accounts for the success of any business is risky business. One cannot control if or when those clients move on to another business and whether they will reduce their budget. Actively work to find new clients to keep your business alive.
3. Lacking Optimism
The simple fact is that optimism can help business owners succeed. It is important for business owners to have a realistic, positive outlook about the future of their business. This means that when setbacks arise, they are more likely to focus on the solutions that will result in an economic boost rather than ponder about the problem.
If business owners are not optimistic, they might be stuck with their heads in the sand, stressing about an issue that could be remedied with clarity and positivity. Why risk an economic loss because of pessimism?
4. Not Making Cyber Security a Priority
One of the most overlooked ways business owners might put themselves at risk is forgetting to make cyber security a priority. The majority of businesses today use the internet to conduct business, be it to advertise, sell, communicate, or carry out financial transactions.
Despite its many benefits, businesses are prime targets of cyber criminals who are constantly finding new ways to hack and steal sensitive customer data. Business owners have a responsibility to protect their businesses against data breaches, data loss or cyber attacks. Purchasing cyber insurance is a great option against a potential cyber attack.
There are unexpected ways that business owners can put themselves at risk. They spread themselves far too thin, putting too many of your business eggs in one basket, lacking optimism and not taking cyber security seriously. Business success requires taking strategic risks, as well as business owners guarding themselves against unexpected risks.