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Is your business a risky business? You bet! Every small business is. Just think for a minute about the hundreds of things that most business owners worry about. A few are predictable or, at the very least, are items that you can plan for and perhaps even control to a certain extent, such as:

  • Expected sales volume
  • Salary costs
  • Taxes
  • Overhead
  • Equipment and supply costs
  • The price you charge for the goods or services you offer to your customers
Others are unpredictable and largely beyond your control, such as:
  • Actions your competitors take
  • Changing tastes and trends
  • The effect these actions and changes have on your market and your customers
  • The local economy and its impact on your customer base (plant closings or unemployment, for example)

Still other events can directly affect your day-to-day operations, reduce profits and result in unexpected financial losses serious enough to cripple or even bankrupt your business. You've probably already considered the most obvious risks, such as fire or injury, and have bought insurance to protect against them. But there are hundreds of other losses and liabilities that every small business faces, many of which are overlooked or ignored.

Large corporations often employ a full-time risk manager to identify and analyze possible exposures to loss or liability. The risk manager takes steps to protect the firm against accidental and preventable loss and to minimize the financial consequences of unpreventable or unavoidable losses. But most small businesses can't afford the services of a risk manager, even part time, so the business owner often has to take on that responsibility.

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This article is reprinted by permission of the SBA and The Travelers, Hartford, Connecticut.
For more information on SBA programs go to www.sba.gov


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