Are you Covered?

You never know if or when disaster will strike.
Put plans in place to protect you, just in case

RECENTLY, a designer friend of mine was injured in a serious accident. Fortunately, he’ll be okay. But the experience made him realize that, had the outcome been worse, his business was not prepared.

Who else knows the status of his accounts? How many outstanding invoices need to be collected? What
are his business assets and liabilities? How would his family manage if he wasn’t able to work?

Too many business owners overlook the risk management aspects of their business plan, leaving them unprepared when disaster strikes. These simple tips will help protect you and your assets should something unfortunate occur.

Your files
Your data and your archives are some of your most valuable assets and you need to take steps to protect them – immediately.

Several years ago, the studio I was working with fell victim to a robbery. Thieves broke in at night and walked away with a number of high-end workstations and a wide variety of electronic media. Luckily, the firm employed a simple but effective backup strategy. Every night, an incremental backup was done across the entire network. The next day, a copy of that data was moved to offsite storage. Nothing fancy – I kept one set of data at home. So in the worst-case scenario, the studio would never lose more
than one day’s worth of production.

Consider using a hosting service to backup your critical data or your long-term archives. Sure it comes at a price but imagine the cost associated with replacing that data should you lose it due to theft, flood or fire. It’s also handy to know that your records are just an FTP site away. Make backing up data a regular part of your business process.

Your staff
You’ve made a significant investment in building intellectual capital – the skills and experience of the talented professionals you have working with you – and you need to protect it. While it is impossible
to guarantee that your staff will remain with you indefinitely, there are ways to tie key staff to your business.

Consider bringing them in as a business partner.

People are less likely to walk away from something they have an ownership stake in rather than a regular “job.” This strategy is often employed in other businesses to ensure there is proper succession planning for the company. Essentially, you’ve handpicked the key professionals who will take over the business in the future. This is good for staff retention and client relationships as they know there is continuity in the practice.

Another way to ensure knowledge doesn’t walk out the door when someone departs is to properly “transfer” knowledge internally. This can easily be accomplished by having regular team meetings where other key staff members are brought up to speed on various aspects of the business. Consider implementing this monthly and communicating it to clients. They’ll appreciate knowing that there is a team looking out for their interests rather than just one individual.

You
The most important, but often overlooked, part of your business is you. Many small businesses have a difficult time surviving when the founder is unable to work – even for only a short period of time. If you are a sole proprietor, it is important that you look at appropriate insurance solutions to protect your business and your customers in case something should happen.

Clive Smith, principal of CS Financial Solutions in Oakville, Ont., has worked with a number of small business owners. “In the early stages of a small business…the sole proprietor should certainly consider putting together an insurance portfolio that includes life insurance, critical illness and disability insurance. The first would be used to repay business debts in the event of the death of the business owner, while the [others] would provide immediate funds in the event of a critical illness or an income in the event of disability.”

If you haven’t considered these issues, it might be time to have your business plan updated with the help of a professional. Do this on a regular basis to make sure that you, your family and your business are protected.

Article originally published in Design Edge Canada magazine. www.designedgecanada.com