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Small Business And Big Risks
by Sam Meenasian
September 6, 2023
white male wearing mask and white female sit at table evaluating company risk

Effective Ways To Keep Risk Under Control

Launching a small business is super exciting. But as any SMB leader will tell you, small businesses always come with BIG risks. 

The good news is that every single potential risk can be controlled effectively if you put systems in place beforehand. It’s important that you minimize risk to avoid jeopardizing your entire business.

In this article, we’ll be highlighting the biggest risks faced by small businesses, and we’ll be showing you how you can keep them under control. 

Diversify Your Product Offerings 

Diversifying your product offerings is good business sense as selling just one or two products is risky. This is especially true if the products you sell are seasonal. For example, fireplaces will be popular in the winter but less so in the summer. 

Moreover, there’s also the chance that a competitor will come along and steal a chunk of your market share. 

Product diversification eases the pressure somewhat and allows you to sell different products throughout the whole year. 

Before you diversify your product offerings, you must take into account your primary objective. You also need to do your research to identify among other things what products your competitors are selling, and you also need to draw up a proper plan and budget. 

Keep Your Employees Safe

If you fail to keep your employees safe in the workplace, you’re putting your business at risk of a nasty lawsuit if something goes wrong. This could not only damage your brand’s reputation, but it could also spell financial disaster. 

As an employer, you must put in place employee safety procedures. You need to control the risks to health or injury that might arise in your place of work, and you need to give information to your employees about how they are protected. This includes providing health and safety information, carrying out regular risk assessments, installing adequate ventilation, heating, and lighting, and ensuring safe passageways. 

It also means investing in companywide healthcare. 

Prevent Cash Flow Problems 

The biggest reason a business crashes and goes under is not a lack of cash - it’s a lack of cash flow. 

A lack of cash flow is typically caused by:

  • Low profits and heavy losses
  • Growing too quickly
  • Too much investment in production capacity
  • Too much stock

As well as tracking your inventory (you can use tools to help with this) so that you don’t end up with too much stock, you must maintain a cash flow forecast throughout the year. Conducting your annual review, as a small business owner, can give you the whole picture of what worked well and what didn’t in the past year. You should also work hard to stay on top of payments, and, if your business is growing too quickly, make sure you secure a short-term loan or an overdraft from your bank or financier. 

Ensure Your Assets

Because an unexpected disaster can happen at literally anytime, it’s a smart idea to ensure your assets with proper business insurance. This will minimize risk and give you peace of mind. 

The good news is that so many insurance products now exist. This allows you to ensure against loss and theft of things like physical assets, goods in transit, cash, and stocks. 

You should also ensure key persons in your company, while employees who commute to work should be given adequate accident insurance. Moreover, if your company plans to send employees abroad at any time, they need to be covered by overseas travel insurance. 

Protect Your Website Security 

Online attacks happen much more often than we’d like. An online attack can cause a data breach that can significantly harm your reputation and erode trust among your customers. An attack might also lead to data loss that can damage your business financially.  

Website security, then, should be among small businesses’ top priorities as they seek to safeguard their future and reduce big risks.

The problem is that a small business is often already so overstretched in terms of finances that fending off online attacks can be too costly. This is why it’s a smart idea to invest in a safe and reliable web hosting provider that already has the security protocols in place to protect you. Look out for key security features such as an SSL certificate, patches, and the latest updates when choosing your next host. You should also look for guarantees. 

It’s also important to keep your software up-to-date, use complex passwords at all times, and invest in website security tools, such as Netsparker and OpenVAS


Sustaining a small business so that it accelerates past the early stages and into the mature stages means managing risk. Use the tips in this article to control the big risks so that you’re then able to focus on the core aspects of your business that will ensure you’re able to keep it going for the long haul. 

About the author
Sam Meenasian headshot
Sam Meenasian
Sam Meenasian is the Operations Director of USA Business Insurance and BISU Insurance and an expert in commercial lines insurance products.
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712 H St NE PMB 98848
Washington, DC 20002

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Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.

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