Posts tagged "risk"

7 Links on Liability

June 6th, 2016 Posted by Entrepreneur, Leadership 2 thoughts on “7 Links on Liability”

Risk ManagementLiability – Each week I identify a different theme of the week and provide you with content, some original and some from external sources, around that theme.

On episode #34 of the Business is ART podcast on the TrueChat Network we talked about liability and some of the things businesses can do to protect themselves from liability – before an incident occurs. In this post, we explore the subject a little further.

A Word on This Week’s Theme

Search around the internet for information on liability and most of what you find is provided on insurance company websites and blogs. The primary online sources I go to for information on a variety of business related topics are virtually dry when it comes to the topic.

Many online magazines have lots of information and takes on risk-taking, but in most cases, they are talking about taking business risks unrelated to liability – like, “Go ahead and launch that new product” type of risks. Very few that I found talk about the risk of liability (beyond data and security).

On #34 of the podcast, my guest was Scott Taylor who indeed works for an insurance company, but Scott offered several points with regard to liability protection (as opposed to insurance coverage), that are worth heading.

Among them are:

  • Incorporate
  • Have a safety plan
  • Keep buildings and facilities up-to-date in terms of maintenance
  • Train your employees (regularly/continuously)

Doing things like this will not only protect you against liability, but may reduce your liability insurance premium.

In terms of risk in the broader sense, make sure you have a risk management plan. A risk management plan needn’t be complicated. Envision a table in an Excel spreadsheet. Your plan can include as few as 4 columns:

  • The risk
  • The impact if the risk occurs (high, medium or low)
  • The likelihood the risk will occur (high, medium or low)
  • The strategy to mitigate against the risk from occurring or minimizing the impact if it does

I relied on some non-traditional sources for links to information around liability this week, but even if the source ultimately would like to sell something to you, the content is good information.

This Week’s Links

Linkis – Many are not aware that profit and non-profit businesses alike should consider liability insurance to cover any directors to the board, be it paid or unpaid. Anyone considering a board position should think about that before accepting. But when should businesses start thinking about it? Here is some insight.

Smart Business – Are you at risk for employee related claims? If you said “No”, you may be in denial about your liability risk. Find out more from this article at Smart Business.

Taylor Thomason Insurance – There are over 100 million lawsuits filed in the U.S each year. What are the latest trends in lawsuits affecting business? From employee and copyright infringement to customers and vendors, here is some of what’s going on.

Live Insurance News – Live insurance reports that cyber insurance premiums are declining as businesses become more and more savvy in protecting against data loss and breaches. But don’t let that lure you in to a false sense of security. You still need protection, especially if you store client data.

Business.comYou and your leadership team should be involved in liability prevention. Business.com explains why and how in a way that might go beyond the obvious.

Entrepreneur – Here, Entrepreneur offers some tips on protecting your business against risk. Follow these tips and use the risk management plan description I provided to start your own plan for managing risks.

Spark – Even non-profits have risk and liability. This post does a good job making the case for director and officer liability coverage for non profits.

Bootstrapping or Investors: Which is Best for Me?

June 3rd, 2016 Posted by Business is ART, Entrepreneur, Owner 1 thought on “Bootstrapping or Investors: Which is Best for Me?”
Boots

Photo courtesy gratisography.com

If we all had rich relatives who were quick to give their money away, starting a business up would be relatively easy. For most of us, that’s not the case.

But if it takes money to make money, as the old saying goes, where do the funds for your business come from?

The two most common ways to fund a startup business are to A: bootstrap it or B: get investors.

To know what’s best for you, you need to understand the pros and cons of each.

Advantages of Bootstrapping

Bootstrapping is really just a fancy word for self-funding. Arguably the biggest advantage is that you retain full control of your business. No shares are sold. You owe nothing to anyone but yourself.

If the business doesn’t work out, sure, you’ll have lost your money, but you won’t lose someone else’s money with it, which is generally a good thing.

Many people who bootstrap also find themselves to be more focused. You don’t have excess capital, so you need to stay as lean as possible. Additionally, you don’t spend any time tracking down and dealing with investors, so you can stay 100% focused on your business.

The Downside of Bootstrapping

While bootstrapping can be easier to get going and comes with less risks, it has its limitations. Specifically, in the realm of cash-flow. If you’re the one funding your business, you’re limited by however much (or little) money you have.

If you take on more work to bring in more money to put towards your new business, that’s time taken away from doing actual work on the new business. Many find the balance of working on the old to fund the new to be a bit tricky.

By bringing on investors, you might be able to gain the funds needed to pursue your business 100%…

Advantages of Investors

Bringing on investors can bring in a much needed surge of finances that can be used to grow your business exponentially faster. Not only does it get you money, but investors can often bring additional connections, personal knowledge and other resources to the table.

Of course, investment money comes with its own price.

Disadvantages of Taking Investment Money

Investment money might appear to be free money at first, but make no mistake, that money comes with strings attached. What those strings are depends on the agreement you make with the investors. It could be shares or voting rights or a certain rate of return.

Regardless, once you take on an investor or two, the business and its success no longer belong to you entirely. And sooner or later, that investment money will run out. You now have a deadline by which you have to achieve success as defined by the investors.

It can be a lot of pressure added to your business, to say the least.

What About Both?

It’s not uncommon for a business to start by bootstrapping and eventually move to bringing on investors. In fact, it’s typically easier to find good investors if you have some semblance of a business started.

It’s also good for you because that generally means you’re bringing in some level of revenue, and the investment money is specifically to grow your business bigger, faster, rather than making it work in the first place.

What’s Best for My Business?

The best option for you depends on a number of factors, ranging from “how much money do you have for bootstrapping” to “what investor opportunities are theoretically available to you”.

Whatever route you go, you’ll need a plan. To learn more about the ART of business, check out my book or contact me directly. I’ve worked hands on with businesses in all different stages.

Plan Canvas is a community and a powerful software for improving your odds of business success and personal fulfillment.

© SeaSeven LLC 2019.
Designed by FRW Studios, LLC.