Within 10 years, 96 percent of companies fail. The reason is simple: they haven't protected their finances. Without sufficient cash to operate, it is tough to stay in business. Cash can drain out of a business in small leaks or a sudden gush. The key is to protect your company's finances so this won't happen to your valuable enterprise. These 4 tips can help ensure you are among the 4 percent still standing when your first decade closes.
I. Keep Your Business and Personal Finances Separated
This is such a common mistake for entrepreneurs to make. During a company's start-up days, it is just natural that the owner might have to make use of their personal credit score and banking relationships to get a loan and get the business established financially. However, once the first days have passed, it is crucial for you to start separating personal and company finances as quickly as possible. If the business is a sole proprietorship or partnership, it can't happen fast enough, since if a business set up with either structure gets sued, the owner(s) can be held personally liable.
II. Use Financial Service Software Solutions With Built-In Security Measures
Gone are the days when a combination lock and a motion-detector light system could deter thieves. Today, all businesses are vulnerable to theft, both the smash-and- grab kind and the stealth cyber security thwarting kind. Establishing your company's financial system through financial service software solutions, such as those developed by Tracy Rawle, will give you built-in security measures to help safeguard your most sensitive in-house and customer/vendor financial data.
III. Employ Additional Security Measures To Ensure Your Customers Feel Safe Shopping With You
This is particularly critical if you have an e-commerce store, since customers today are becoming increasingly more savvy about which websites are secure and which are not.
Here are tips to ensure your website keeps sensitive data secure:
- Use encryption (https) and padlock protocols for your online store.
- Take credit rather than debit cards or use third-party services such as Google Checkout, Stripe and Paypal which have their own built-in fraud detection systems.
- Build in authentication measures (such as asking for the 3-digit number on the back of credit cards) and educate customers about those measures.
- Employ a virus and malware scanner and post logos on your e-commerce site to let customers know you are vigilant about their data security.
By ensuring a safe and secure online shopping experience, you can encourage new customers to feel safe buying from you as your company grows.
IV. Implement A Financial Security Policy And Train Staff
Every company should develop and implement a company-wide financial security policy and train staff in steps to take to maintain data and financial security while doing their jobs.
The Small Business Administration (SBA) recommends incorporating these elements:
- Password policies, including logins/logouts, use of remote devices and change alerts.
- Adding extra security to your bank accounts and credit cards.
- Using a firewall, anti-virus, anti-malware/spyware, continual backup system and encryption system for your data.
- Consider insurance for cybercrime in addition to the regular policies you carry. Taking financial security seriously can save you from losing the estimated $155,000 most small businesses sacrifice to fraud annually.
These 4 tips just might make the difference between the success or failure for your business. By educating yourself and your staff and implementing policies to safeguard company finances, you can give your business the best chance of long-term success.
I hope you enjoyed this post on protecting your company's finances!
Interested in more advice to boost your business?
Read My Posts:
- Key Steps In Developing Long Term Growth
- 5 Ways To Market Your New Business
Best Of Luck In Business To You All!
Michael J. Schiemer of Schiemer Consulting
Enthusiastic Entrepreneur & Owner of Frugal Business
Digital Marketing, Social Media, & Entrepreneurship on a Budget
Mike Schiemer Builds Better Business
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