Luckily, I had done my homework at startup and had some basic protection practices in place. Here’s a small checklist you should follow to protect your business:
1. Separate your business finances from your personal finances. Structuring your business as a corporation or an LLC makes your business a separate entity and protects your personal assets in case you’re ever taken to court. Yes, there are more rules, fees and paperwork involved in incorporating, but it’s worth the money and effort.
2. Get business insurance. At the very least you need general liability insurance to cover your company against accidents related to your product or service, and property and casualty insurance to cover your business against losses from events like fire and burglary. Even if you run your business from home, don’t count on your homeowners’ insurance covering your business—in most cases, it won’t. If you have employees, your state may require worker’s compensation insurance. Other smart policies include business interruption insurance to pay for your business’s expenses and income if your company is unable to operate due to a disaster, and key man life insurance so the business can keep going if something happens to you.
3. Surround yourself with experts. You may be an expert in your business, but I never would have survived the last seven years without a team of people I could rely on to guide me and protect my business. Make sure you have an outstanding accountant and a lawyer you trust. Other experts I have relied on include peers with expertise in areas that were new to me, such as digital marketing and sales negotiation.
Luckily, I knew about the mentors available to me at SCORE and reached out for help whenever I had a question. Your needs may be different and your business may require more protection depending on your industry. The key is to be as prepared as possible so when your business is at risk, you have the right weapons and allies in your corner to protect it.